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

To: Kerm Yerman who wrote (13066)	10/28/1998 7:56:00 PM
From: Herb Duncan	Respond to of 15196

ACQUISITIONS-MERGERS / Millennium Closes Acquisition From EnerVest ASE SYMBOL: MLN OCTOBER 28, 1998 CALGARY, ALBERTA--Millennium Energy Inc. reports that it has closed its previously announced acquisition of assets from two limited partnerships managed by EnerVest Resource Management Ltd., following receipt by EnerVest of certain regulatory clearances. The purchase price of $4,149,490 was satisfied by Millennium issuing 16,597,959 common shares at $0.25 per share. The total number of Millennium common shares now outstanding is 25,897,959. Reserves for the new properties were estimated at 656 mboe (proved plus one-half probable) as at April 1, 1998 and 1999 production is expected to average 246 boe per day. Millennium is now reviewing a number of strategies to optimize the value of these new assets, including exploration and development opportunities, swaps, the acquisition of additional interests in key areas and the disposition of minor interests. In conjunction with closing, Millennium has received a commitment from its lender for a new credit facility of up to $2 million.

To: Kerm Yerman who wrote (13066)	10/28/1998 8:05:00 PM
From: Herb Duncan	Respond to of 15196

FINANCING / Penn West Petroleum Announces an Offering of Common Shares on a Bought Deal Basis TSE SYMBOL: PWT OCTOBER 28, 1998 CALGARY, ALBERTA-- NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE US Penn West Petroleum Ltd. is pleased to announce that it has agreed to issue 4.0 million common shares from treasury, on a bought deal basis and subject to regulatory approval, at a price of $20.00 per share. The syndicate of underwriters for the deal will be led by FirstEnergy Capital Corp., and will also include CIBC Wood Gundy Securities Inc., RBC Dominion Securities Inc., Peters & Co. Limited, Nesbitt Burns, ScotiaMcleod Inc., TD Securities Inc., Research Capital Corporation, and Sprott Securities Limited. Closing is expected to occur on November 17, 1998. Penn West will use the net proceeds from the share issue to fund its ongoing program of acquisitions, development and exploration. This news release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. The common shares offered will not be or have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration, or an applicable exemption from the registration requirements of such Act. Penn West Petroleum Ltd. is a Canadian company engaged in the exploration, development and production of natural gas and crude oil. Penn West's common shares trade on the Toronto Stock Exchange under the trading symbol "PWT".

To: Kerm Yerman who wrote (13066)	10/28/1998 8:07:00 PM
From: Herb Duncan	Respond to of 15196

FINANCING / Bridgetown Energy Corporation To Raise $1,000,000. ASE SYMBOL: BRY OCTOBER 28, 1998 CALGARY, ALBERTA--Bridgetown Energy Corporation (ASE:BRY) announced today that it has received a final receipt from the Alberta Securities Commission for a Rights Offering Prospectus. Bridgetown will be issuing to shareholders of record resident in Alberta as at the close of business on November 16, 1998, rights to subscribe for Units. Each Unit consists of one Common Share and one Common Share Purchase Warrant. Two rights plus the sum of $0.50 will entitle the holder of such rights to purchase one Unit. Arrangements have been made for shareholders not resident in Alberta to have the rights that they may be entitled to receive sold by CIBC Mellon Trust and the proceeds remitted to such non-resident shareholders. The rights have been conditionally approved to trade on The Alberta Stock Exchange from November 12th, 1998 to February 1, 1999. The Purchase Warrants have been conditionally approved to trade from February 1, 1999, to their expiry, February 1, 2000. Each Purchase Warrant entitles the holder to purchase one Common Share at a price of $0.70. Net proceeds from the issue will be used to repay long term debt. Bridgetown currently has 3,807,350 common shares outstanding and this rights offering could potentially increase common shares outstanding to 5,711,025, or more assuming 275,000 options held by officers and directors are exercised prior to the record date. Commenting on the offering, Mr. R.J. Cargo, Chairman, said, "Since its initial capitalization as a JCP in 1995, Bridgetown has not returned to the equity market. Although this has restricted the number of shares available to the public, Bridgetown has done a strong job in building shareholder value. Based on its initial capitalization of $0.20 per common share, Bridgetown has grown to a net asset value (NAV) in excess of $1.00 per share and it is a profitable Alberta gas producer with numerous drilling and other opportunities to exploit in its recently acquired package of gas properties. The Board of Directors elected to proceed with the Rights Offering because Bridgetown's historical share price on the ASE has significantly lagged behind its NAV. With proven and probable gas reserves of 7 BCF and an improved outlook for gas pricing, the Rights Offering provides shareholders the first opportunity to further participate in Bridgetown's growth, or alternatively to sell their rights, while Bridgetown will benefit by both increasing its capital base and public share float."

To: Kerm Yerman who wrote (13066)	10/28/1998 8:12:00 PM
From: Herb Duncan	Respond to of 15196

FINANCING / Baytex Energy Arranges Private Placement TSE, ASE SYMBOL: BTE.A OCTOBER 28, 1998 CALGARY, ALBERTA--Baytex Energy Ltd. (BTE.A - TSE, ASE) of Calgary, announced today that it has arranged for a private placement issuance, from treasury, of 1.2 million Class A, Flow-Through shares at a price of $5.70 per share. The issue was placed, on a best efforts basis, by a syndicate of agents which includes Nesbitt Burns Inc., First Marathon Securities Limited, Goepel McDermid Inc. and Yorkton Securities Inc. Closing is scheduled to be on or before November 24, 1998. Proceeds from the issue will be used to fund Baytex's winter capital expenditure program. Baytex is also pleased to announce the appointment of Mr. John Leach, CA to the position of Vice President Finance and Administration. Mr. Leach has been with Baytex since 1993 in various senior positions in the Company's Finance Department. In his new position, Mr. Leach will be reporting to Mr. Raymond Chan, Senior Vice President and Chief Financial Officer. Other recent appointments include the promotion of Mr. Garry Wasylycia to the position of Vice President of Exploration. Mr. Wasylycia joined Baytex in 1996 as a senior member of the Company's Exploration Department. It is with regret that Baytex announces the resignation of Mr. Norbert ("Bert") Kloster from his position as Executive, Vice President and a Director of the Company. Mr. Kloster was a founder of Baytex and has played an integral part in its growth from 1993 to the present. Baytex would like to thank Mr. Kloster for his contributions in the past years and wish him the best in his future endeavors. Baytex Energy Ltd. is a Canadian company engaged in exploration, development and production of natural gas and crude oil. The Company's Class A shares are listed on The Toronto Stock Exchange and The Alberta Stock Exchange under the trading symbol "BTE.A".

To: Kerm Yerman who wrote (13066)	10/29/1998 4:54:00 AM
From: Kerm Yerman	Respond to of 15196

SERVICE SECTOR / Veritas DGC Inc. Financing VERITAS DGC INC. ANNOUNCES SALE OF 9 3/4% SENIOR Date: 10/28/98 6:55:44 PM Dateline: HOUSTON, TX Stock Symbol: VTS Veritas DGC Inc. announced today that it has sold $60 million principal amount of 93/4% Senior Notes due 2003, Series B (the "Notes") in a private placement to qualified institutional buyers at a purchase price of 100% of the principal amount of the Notes. The sale of the Notes was not registered under the Securities Act of 1933 and, therefore, may not be offered or sold in the United States absent registration or an applicable exemption from registration. The $58.2 million of net proceeds from the transaction are to be used for general corporate purposes. Veritas DGC Inc. is a leading provider of land, transition zone and marine-based seismic data acquisition, seismic data processing, and multi-client data sales to the petroleum industry.

To: Kerm Yerman who wrote (13066)	10/29/1998 4:58:00 AM
From: Kerm Yerman	Respond to of 15196

SERVICE SECTOR / Request Seismic Surveys Ltd. continues to report strong earnings growth REQUEST CONTINUES TO REPORT STRONG EARNINGS GROWTH Date: 10/28/98 5:54:40 PM Dateline: CALGARY, ALBERTA Stock Symbol: RSH Mr. Todd Chuckry, President and Chief Executive Officer of Request Seismic Surveys Ltd. ("Request" or the "Corporation") is pleased to announce that Request continues to report strong earnings growth for the nine months ended September 30, 1998. Gross revenue increased by 30% over the same nine month period in the prior year. Gross margin increased to 23% from 12% in the prior year. Net income for the nine months ended September 30, 1998 was $1,808,736 as compared to $194,766 for the same period ending September 30, 1997. All of the 1,134,300 unexercised common share purchase warrants ("Warrants") issued pursuant to the Corporation's IPO of October 9, 1997 expired on October 9, 1998. The 2,925,000 special warrants (the "Special Warrants") issued by the Corporation on July 16, 1998 were deemed exercised on October 7, 1998 for a like number of Common Shares. The Warrants and the Special Warrants are included in the fully diluted earnings calculation reported as at September 30, 1998 as set forth below. Participation programs are well underway with 400 km completed in the 3rd Quarter. Forest fires in Northern Alberta in July and August delayed the recording of our seismic programs Narraway and Muskeg. Although the fires did not directly affect our survey areas, it did affect our access to equipment, as both areas are heli-access only. The field operations on these programs did not commence until late September. As a result, they will not be completed until the first week in November. We were able to complete approximately 400 km of our proposed 2,200 km of winter program in Q3. The remaining 1,800 km will be completed by March, 1999. We currently have four seismic crews working on four of the six proposed programs. We are still seeing increasing demand for high resolution 2D seismic data through participation surveys in gas prone areas. Based on results to date and indications from continued operation in the Fourth Quarter, the Corporation is confident it will meet or exceed its earnings target of $0.26 per share. Comparative summary financial results for the nine months ended September 30, 1998 are as follows: Consolidated Balance Sheet As at September 30, 1998 (unaudited) Assets 1998 1997 Current Assets $10,054,371 $4,625,367 Other Assets 417,415 84,208 Seismic Data Library 7,596,171 - Total Assets $18,067,957 $4,709,575 Liabilities Current Liabilities $7,382,301 $4,261,337 Long-Term Advance 890,200 - Shareholders' Equity 9,795,456 448,238 Total Liabilities and Shareholders' Equity $18,067,957 $4,709,575 Consolidated Statement of Earnings and Retained Earnings For the Nine Months Ended September 30, 1998 (unaudited) 1998 1997 Revenue $22,779,680 $17,586,772 Cost of Sales 14,916,732 15,422,697 Amort. of Seismic Data Library 2,673,173 - Gross Margin 5,189,775 2,164,075 Earnings before income taxes 3,292,649 315,721 Income taxes 1,483,913 120,955 Net Earnings $1,808,736 $194,766 Earnings Per Share Basic $0.24 $0.04 Fully Diluted $0.18 $0.04 Consolidated Statement of Changes in Cash Position As at September 30, 1998 (unaudited) CASH PROVIDED BY (USED FOR): 1998 1997 Operations Net earnings 1,808,736 194,766 Amortization 2,738,273 16,560 Loss on Disposal of Assets 9,781 - Cash Flow from Operations 4,556,790 211,326 Change in non-cash working capital 148,965 -68,585 Financing 6,029,855 8,833 Investing Activities -9,046,171 -68,607 Increase in Cash 1,689,439 82,967 Cash at End of Period 3,583,072 893,195 Cash Flow from Operations per Share Basic $0.61 $0.04 Fully Diluted $0.44 $0.04 The Corporation is in the business of providing access to seismic data information to customers within the oil and gas industry. The Corporation manages the flow of seismic information for sale purposes on behalf of other companies, acts as a broker to facilitate the licensing of seismic information between vendors and purchasers and creates, markets and supervises the acquisition of new seismic data inventory thereby adding to the asset base of the Corporation.

To: Kerm Yerman who wrote (13066)	10/29/1998 5:04:00 AM
From: Kerm Yerman	Respond to of 15196

ACQUISITIONS - MERGERS / EuroGas to Acquire 31.4% interest in Canadian oil and gas producer Big Horn Resources NEW YORK, NY, Oct. 28 /CNW/ - EuroGas, Inc. (''EuroGas'', or the ''Company'') announces that it will acquire 8,500,000 shares of Big Horn Resources Ltd. (''Big Horn''), a publicly held Canadian oil and gas producer, via a private placement for C.$5,525,000 (US$3,591,250), subject to Big Horn shareholder approval. The issue price of the private placement is C$0.65 per share. Following the completion of the private placement, EuroGas will own a 31.4% interest in Big Horn (approximately 28.1% on a fully diluted basis). In addition, EuroGas has obtained the right of first refusal from three private Big Horn shareholders to acquire up to 4,500,000 common shares of Big Horn and warrants to acquire additional 2,000,000 shares of Big Horn. The common shares and warrants held by these three shareholders represent an approximately 21.5% stake in Big Horn (on a fully diluted basis). Big Horn Resources Ltd. is a Calgary, Alberta based oil and gas producer that has recently entered into an agreement to acquire Ironwood Petroleum Ltd. (''Ironwood''). Average production for the first half of 1998 for Big Horn and Ironwood was 566 barrels of oil equivalent per day (''boepd'') and 327 boepd, respectively. Current combined production is approximately 900 boepd, with a gas to oil mix of approximately 50:50. Combined total proved and probable resources are in excess of 3,000,000 barrels of oil equivalent (''boe'') reserves. EuroGas will acquire the common shares of Big Horn for investment purposes. Although the Company has no immediate plans to consider a business combination proposal, it may consider such a combination in the future. EuroGas may make further purchases of Big Horn through open market transactions or through private placements. EuroGas has no current plans to appoint a nominee to the Board of Directors of Big Horn. EuroGas controls methane gas concessions in Poland and has oil and gas exploration and development joint ventures in Poland, Ukraine, the Slovak Republic, and in the Sakha Republic (Yakutia). EuroGas, Inc. common stock is traded on the OTC Bulletin Board under the symbol EUGS, and on the Frankfurt, Berlin, Munich, Stuttgart and Hamburg Stock Exchanges under the symbols, EUG.F, EUG.B, EUG.M, EUG.S and EUGS.H respectively.

To: Kerm Yerman who wrote (13066)	10/29/1998 5:07:00 AM
From: Kerm Yerman	Respond to of 15196

MERGERS - ACQUISITIONS / Black Sea Energy and Sunwing Energy agree to merge to create an expanded Canadian company active on international oil frontiers CALGARY, Oct. 28 /CNW/ - David Martin, Chairman of Black Sea Energy Ltd., announced today that the directors of Black Sea and Sunwing Energy Ltd. have approved an agreement in principle to merge the two companies. The merger, which is subject to necessary shareholder and regulatory approvals, will create an expanded Canadian company, based in Calgary, with interests in exploration and development prospects in energy-rich regions of Southern California, China, Peru and Russia. ''This is a unique opportunity to combine the interests, and strengths, of two companies with solid potential to become significant petroleum producers in the near term,'' Mr. Martin said. Sunwing, a Canadian private company, was awarded the first onshore production-sharing agreement in China, where it has been active since 1995. Sunwing currently has production-sharing agreements with the China National Petroleum Company at Daqing, in northeastern China, and at Dagang, near Beijing. Both are low-risk development projects which call for Sunwing to conduct an initial pilot project, and to design and implement a development plan, based on existing and reprocessed seismic and on the data gained from the extensive drilling program previously carried out by the Chinese partner. While only nominal production occurred, the previous drilling delineated more than 80 million barrels of recoverable oil, at a gravity of 32 degrees API and at depths of 1,400 to 3,600 metres. Under the production-sharing agreements, Sunwing will fund all development costs, production revenue will be denominated and settled in US dollars and Sunwing's share of revenue will be approximately 82% before recovery of costs (payout), reverting to 49% after payout. ''Sunwing has developed an important presence in China in recent years, where it is poised to begin sharing in production at the Daqing and Dagang enhanced oil recovery projects,'' Mr. Martin said. ''These China interests provide an excellent risk balance to Black Sea's present exploration projects in Peru and California.'' Under the agreement in principle, the assets and liabilities of both Black Sea and Sunwing will be brought together within a new corporate entity, yet to be named. Mr. Martin, formerly President and Chief Executive Officer of Occidental Oil and Gas Corporation, will serve as Chairman of the new company's Board of Directors. As material developments in their respective businesses could affect the values of either or both companies before the completion of the proposed merger, the boards of the two companies will commission independent valuations of the companies, targeted for completion on or about December 31, 1998. The valuations will be used as a basis for calculating the final ratios for the conversion of common shares of Black Sea and Sunwing into new common shares of the merged entity. Robert M. Friedland, a major shareholder of both Black Sea and Sunwing, is expected to be the largest shareholder of the new entity. The proposed merger will be a ''related party transaction'' for the purposes of applicable securities laws. As part of the merger agreement in principle, Black Sea has agreed, subject to the approval of the Toronto Stock Exchange, to advance to Sunwing up to an aggregate of approximately US$2 million to fund pre-merger operating costs and transaction expenses. If the proposed merger does not proceed, Black Sea will have the option of converting outstanding advances into a participating interest in the Sunwing projects of approximately 10%, depending on independent asset valuations. Black Sea has recently acquired half of Pangaea Energy International's 88% interest in the Block 71 project in Peru's Ucayali Basin, where Pangaea is preparing to spud its initial Shahuinto well in early November. The Shahuinto prospect is a seismically-defined, 57,000-acre, four-way closed structure within Block 71, which covers a total of 2.5 million acres. Block 71 is surrounded by exploration blocks held by major international oil companies Shell, Mobil, Esso, Chevron, Phillips, Arco, Repsol, Anadarko and Elf. Black Sea also has entered into an agreement with Diatom Petroleum Inc., of Bakersfield, California, to acquire an exclusive interest in prospects to be identified within an area of 920,000 acres in California's southern San Joaquin Valley. The area is situated in the middle of one of the largest oil-producing regions in the U.S. Diatom acquired its rights through an exploration alliance with a major Californian production company. Black Sea's common shares trade on the Toronto Stock Exchange under the symbol BSX.

To: Kerm Yerman who wrote (13066)	10/29/1998 5:11:00 AM
From: Kerm Yerman	Respond to of 15196

EARNINGS / Shell Canada Announces Third Quarter Earnings CALGARY, Oct. 28 /CNW/ - Shell Canada Limited announced today third quarter earnings of $76 million or 26 cents per Class ''A'' Common Share compared to earnings of $167 million or 58 cents per share for the third quarter of last year. The 1997 results included a $60 million settlement of income tax and related interest. Lower commodity prices in Resources and reduced refinery margins in Oil Products had a negative effect on the current quarter's results. Earnings for the first nine months of 1998 were $317 million or $1.09 per share compared to $430 million or $1.36 per share for the same period in 1997. The reduction in earnings is primarily due to continued low commodity prices and reduced volumes due to asset divestments within Resources. Cash flow for the first nine months of 1998, before movements in working capital, was $587 million. This compares to $713 million for the same period in 1997. Capital and exploration expenditures were $536 million in the first nine months of 1998, up from $367 million in the same period of 1997. The ongoing construction of the Sable offshore natural gas project is the main reason for the increase in capital expenditure. ''The combined impact of low commodity prices and a slowing economy has tempered our quarterly results. However, the Company's strong financial position allows us to sustain our major investments,'' said C.W. Wilson, President and Chief Executive Officer, Shell Canada Limited. SHELL CANADA LIMITED SEGMENTED INFORMATION Resources Resources earnings in the third quarter were $30 million compared to $57 million for the same period in 1997. The earnings decline results primarily from lower prices for crude oil and natural gas liquids as well as reduced volumes associated with asset divestments. Improved prices for natural gas partially offset this decline. In addition, the 1997 third quarter earnings included a gain related to an income tax refund. Development of the Sable offshore project continued on schedule with expenditures of $184 million in the first nine months of 1998. Resources earnings for the first nine months of 1998 were $121 million compared to $207 million for the same period last year. Oil Products Oil Products earnings in the third quarter were $59 million compared to $73 million for the same period in 1997. The main reason for the earnings decline was a significant reduction in refining margins. Earnings for the first nine months of 1998 were $194 million compared to $207 million for the same period last year. Toward the end of the third quarter, Oil Products experienced slowing sales demand and deteriorating product margins. Oil Sands The bitumen extraction pilot plant at the Muskeg River Mine site commenced operations during the third quarter. To date, these operations have produced bitumen within the expected specifications required for upgrading. Further trials are required to test different operating conditions and different product specifications. Following these trials, sample batches of bitumen will be processed in an upgrading pilot which will simulate the Scotford upgrader. The Regulatory process for the upgrader and the mine will enter the public hearing stage during the fourth quarter. Corporate Corporate expenses in the third quarter were $13 million compared to earnings of $37 million during the same period of last year. The 1997 results included interest income on a tax settlement. The decline in the Canadian dollar during the third quarter of 1998 resulted in foreign exchange losses on the Company's U.S. dollar debt. The Corporate segment had earnings of $2 million for the first nine months of 1998 compared to earnings of $16 million during the same period last year. During the third quarter, the Company commenced a normal course issuer bid to buy back up to one percent of its 290,167,640 Class ''A'' Common Shares issued and outstanding. The bid is to counter dilution of the Common Shares under Shell's employee stock option program. By the end of September, a total of 323,600 Class ''A'' Common Shares had been purchased at market price at cost of $8 million. Earnings Cash Flow Capital Expenditures ($ millions) ($ millions) ($ millions) ------------------------------------------------------------------------- Q3 97 167 282 129 Q4 93 227 153 Q1 98 115 195 183 Q2 126 186 146 Q3 76 206 207 SHELL CANADA LIMITED Financial Highlights ($ millions, except as noted) (unaudited) Third Quarter Nine Months 1998 1997 1998 1997 ------------------------------------------------------------------------- Earnings 76 167 317 430 Revenues 1 142 1 437 3 369 4 084 Cash flow from operations 206 282 587 713 Return on average common shareholders' equity (%) - - 12.6 15.9 Return on average capital employed (%) - - 12.0 14.7 Per Class 'A' Common Share (dollars) Earnings 0.26 0.58 1.09 1.36 Cash flow 0.71 0.97 2.02 2.25 Dividends paid 0.18 0.18 0.54 0.48 Results by Segment Earnings Resources 30 57 121 207 Oil Products 59 73 194 207 Corporate (13) 37 2 16 ------------------------------------------------------------------------- Total 76 167 317 430 ------------------------------------------------------------------------- Revenues Resources 184 224 539 729 Oil Products 991 1 184 2 925 3 441 Corporate 6 91 22 113 Inter-segment sales (39) (62) (117) (199) ------------------------------------------------------------------------- Total 1 142 1 437 3 369 4 084 ------------------------------------------------------------------------- Cash flow from operations Resources 104 145 287 403 Oil Products 97 107 291 290 Corporate 5 30 9 20 ------------------------------------------------------------------------- Total 206 282 587 713 ------------------------------------------------------------------------- Capital and exploration expenditures Resources 143 80 345 261 Oil Sands 18 5 44 9 Oil Products 46 43 90 95 Corporate - 1 57 2 ------------------------------------------------------------------------- Total 207 129 536 367 ------------------------------------------------------------------------- Return on Average Capital Employed (ROACE): capital employed is a total of equity and long-term debt including the current portion of long-term debt. ROACE is earnings plus after-tax interest expense on debt divided by the average of opening and closing capital employed for the twelve months to September 30. Certain amounts previously reported have been reclassified to conform with the current year's presentation. SHELL CANADA LIMITED Operating Highlights (unaudited) Third Quarter Nine Months 1998 1997 1998 1997 ------------------------------------------------------------------------- Production Natural gas - gross (mmcf/d) 571 679 595 659 Crude oil and bitumen - gross (bbls/d) 24 200 28 300 22 900 27 900 Condensate - gross (bbls/d) 25 600 26 100 24 900 24 500 Ethane, propane and butane - gross (bbls/d) 31 500 30 600 30 800 31 000 Sulphur - gross (tons/d) 6 700 6 900 6 700 6 600 Crude oil processed by Shell refineries (m3/d) 43 900 42 700 41 700 40 700 Gas and Sulphur Sales Natural gas sales from own production - gross (mmcf/d) 564 654 590 638 Sulphur sales from own production - gross (tons/d) 5 200 6 300 6 300 6 600 Oil Products Sales Gasolines (m3/d) 21 500 20 800 20 500 19 800 Middle distillates (m3/d) 16 900 17 200 16 900 16 500 Other products (m3/d) 8 100 8 300 7 000 7 200 ------------------------------------ 46 500 46 300 44 400 43 500 Prices Natural gas average plant gate netback price ($/mcf) 1.81 1.47 1.71 1.87 Crude oil average field gate price ($/bbl) 18.03 24.55 19.27 25.81 Condensate average field gate price ($/bbl) 17.34 25.46 19.32 26.63 Ethane, propane and butane average field gate price ($/bbl) 6.46 9.55 7.14 11.11 ------------------------------------------------------------------------- Natural Gas Avg. Price Crude Oil Avg. Price Condensate Avg. Price (Plant Gate Netback) (Field Gate) (Field Gate) ($/mcf) ($/bbl) ($/bbl) ------------------------------------------------------------------------- 97 Q3 1.47 24.55 25.46 97 Q4 1.81 25.77 27.06 98 Q1 1.51 21.45 22.21 98 Q2 1.84 18.30 18.24 98 Q3 1.81 18.03 17.34 ------------------------------------------------------------------------- SHELL CANADA LIMITED Consolidated Statement of Earnings ($ millions, except as noted) (unaudited) Third Quarter Nine Months 1998 1997 1998 1997 ---------------------------------------------------------------------- Revenues Sales and other operating revenues 1 129 1 337 3 329 3 954 Dividends, interest and other income 13 100 40 130 ---------------------------------------------------------------------- 1 142 1 437 3 369 4 084 ---------------------------------------------------------------------- Expenses Purchased crude oil, petroleum products and other merchandise 618 772 1 804 2 251 Operating, selling and general 260 271 783 795 Exploration 17 12 36 33 Depreciation, depletion, amortization and retirements 99 92 175 222 Interest on long-term debt 19 18 51 49 Foreign exchange on long-term debt 18 5 35 13 ---------------------------------------------------------------------- 1 031 1 170 2 884 3 363 ---------------------------------------------------------------------- Earnings Earnings before income taxes 111 267 485 721 Income taxes 35 100 168 291 ---------------------------------------------------------------------- Earnings 76 167 317 430 ---------------------------------------------------------------------- Earnings per Class ''A'' Common Share (dollars) 0.26 0.58 1.09 1.36 Common Shares outstanding 290 290 290 317 (millions - monthly weighted average) ---------------------------------------------------------------------- Certain amounts previously reported have been reclassified to conform with the current year's presentation. SHELL CANADA LIMITED Consolidated Statement of Cash Flows ($ millions) (unaudited) Nine Months 1998 1997 ---------------------------------------------------------------------- Cash from Operating Activities Cash flow from operations (1) 587 713 Movement in working capital and other related to operating activities (331) 44 ---------------------------------------------------------------------- 256 757 ---------------------------------------------------------------------- Cash Invested Capital and exploration expenditures (536) (367) Proceeds on disposal of properties, plant and equipment 244 132 Investments, long-term receivables and other (70) (1) ---------------------------------------------------------------------- (362) (236) ---------------------------------------------------------------------- Cash from Financing Activities Common Shares buy-back (Note 1) (8) (976) Proceeds from exercise of Common Share stock options 1 6 Dividends paid (157) (154) Long-term debt repayments and other (3) (4) ---------------------------------------------------------------------- (167) (1 128) ---------------------------------------------------------------------- Decrease in Cash (273) (607) ---------------------------------------------------------------------- Cash at beginning of year 619 1 190 Cash at September 30 (2) 346 583 ---------------------------------------------------------------------- 1. Cash flow from operations comprises earnings before exploration expenses adjusted for deferred income taxes, depreciation, depletion, amortization, retirements and other items not affecting cash. 2. Cash comprises cash and highly liquid short-term investments less short-term borrowings. SHELL CANADA LIMITED Consolidated Statement of Financial Position ($ millions) (unaudited) Sept. 30, 1998 Dec. 31, 1997 ---------------------------------------------------------------------- Assets Current assets Cash and short-term investments 346 619 Accounts receivable 642 717 Inventories 614 589 Prepaid expenses 118 114 ---------------------------------------------------------------------- 1 720 2 039 Investments, long-term receivables and other 179 214 Properties, plant and equipment 3 803 3 713 ---------------------------------------------------------------------- 5 702 5 966 ---------------------------------------------------------------------- Liabilities Current liabilities Accounts payable and accrued liabilities 661 705 Income and other taxes payable (21) 304 Current portion of site restoration and other long-term obligations 20 28 Current portion of long-term debt 356 1 ---------------------------------------------------------------------- 1 016 1 038 Site restoration and other long-term obligations 190 189 Long-term debt 418 740 Deferred income taxes 725 799 ---------------------------------------------------------------------- 2 349 2 766 ---------------------------------------------------------------------- Shareholders' Investment Capital stock 100 4% Preference Shares 1 1 289 853 940 Class ''A'' Common Shares (1997 - 290 127 940) 469 469 Retained earnings 2 883 2 730 ---------------------------------------------------------------------- Shareholders' Investment 3 353 3 200 ---------------------------------------------------------------------- 5 702 5 966 ---------------------------------------------------------------------- SHELL CANADA LIMITED Notes to Consolidated Financial Statements (unaudited) 1. Share Buy-Back On July 29, 1998, Shell Canada Limited announced its intention to make a normal course issuer bid, to repurchase for cancellation up to one percent of its 290,167,640 Class ''A'' Common Shares issued and outstanding as at July 28, 1998. The bid is to counter current and potential dilution of the common shares under Shell's employee stock program. The bid began on August 17, 1998 and will end on or before August 16, 1999. To date, 323,600 shares have been repurchased at market price for a total cost of $8 million. Under as Issuer Bid in June, 1997, Shell repurchased 15,999,784 of its Class ''A'' Common Shares at a price of $61.00 a share for a total cost of $976 million. 2. Year 2000 The change of century is a challenge that could affect the Company's core business if preparation is inadequate. Shell anticipates completion of the changes necessary for the Year 2000 implementation by early 1999. The costs associated with these changes are expected to be less than $10 million before tax.

To: Kerm Yerman who wrote (13066)	10/29/1998 5:13:00 AM
From: Kerm Yerman	Respond to of 15196

FINANCING / Canadian Occidental Petroleum Prices Offering of US $225 Million of Preferred Securities CALGARY, Oct. 28 /CNW/ - Canadian Occidental Petroleum Ltd. (CXY-TSE, ME, AMEX) announced today that it has priced its offering of preferred securities (''Securities''). The total offering has been increased from US $125 million as previously announced to US $225 million. Each security represents US $25 principal amount of unsecured junior subordinated debentures, bears interest at 9.75% and matures on October 30, 2047. This offering is being made under the multi-jurisdictional disclosure system between Canada and the United States. The Securities have been approved for listing on the New York Stock Exchange, subject to official notice of issuance. The Company expects trading of the Securities to commence within 30 days of closing. Net proceeds from the offering will be used to repay indebtedness under the Company's unsecured syndicated term credit facilities. ''Our financial strategy is to take advantage of this low interest rate environment to increase our liquidity, improve our overall debt structure and create a solid long-term fixed-rate financial base,'' said Marvin Romanow, CanadianOxy's Chief Financial Officer. ''Over the past year we have increased the average term to maturity of our debt from 4 years to 16 years, and now have 54% of our long-term debt at fixed rates. Our overall average interest rate is now 6.9%. This base will provide the additional financial flexibility we need to pursue the many opportunities we have in our exploration and development portfolio.'' The underwriting syndicate is lead managed by Merrill Lynch & Co., with co-managers Salomon Smith Barney, Morgan Stanley Dean Witter, PaineWebber Incorporated, Prudential Securities Incorporated, and CIBC Oppenheimer. The Securities are only qualified and offered for sale in the United States. This press release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these Securities in any State or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such State or other jurisdiction. A copy of the Prospectus relating to these securities may be obtained from: Merrill Lynch & Co. World Financial Center North Tower, 250 Vesey Street New York, New York U.S.A. 10281 Attention: Syndicate Operations Phone: 212-449-6500 CanadianOxy is an independent, Canadian-based global energy and chemicals company. Core business activities include the exploration, development, production and marketing of crude oil and natural gas, and the manufacturing and marketing of industrial chemicals. CanadianOxy is one of Canada's largest oil and gas producers with daily production of approximately 240,000 barrels of oil equivalent.

To: Kerm Yerman who wrote (13066)	10/29/1998 5:18:00 AM
From: Kerm Yerman	Read Replies (2) \| Respond to of 15196

FIELD ACTIVITIES / Quadra Resources Drills 3 Successful Gas Wells in Colombia Application for Commerciality Underway CALGARY, Oct. 28 /CNW/ - Quadra Resources Corp (QDRA.U, CDN), in conjunction with its joint venture partners Texican Oil PLC and Petrolex Energy Corporation, is pleased to announce the drilling and test results of the Compae No. 3 well. This well is the step-out evaluation well of the Compae No. 1 discovery well on the Maracas Association Contract in northern Colombia which was drilled to a total depth of 5173 ft and cased. Electric logs indicated four major zones of interest containing approximately 500 ft of net hydrocarbon pay. Lagunitas, the lowest zone, tested at limited flow rates of 400 bopd of 34 degree API crude oil and 1.1 million cubic ft of gas from a 140 ft net pay section. The Maracas zone indicated 130 ft of hydrocarbon pay from logs. The top zones, Socuy and La Luna, with net pay of 225 ft tested gas flows of 10 million cubic ft per day on a 44/64'' choke with a calculated AOF of 36 million cubic ft per day. The Lagunitas zone is being analyzed for a possible horizontal well to be drilled before year end. The Compae No. 2 well was spudded on August 24, 1998, drilled to a total depth of 2912 feet subsurface, and completed as an open hole natural gas well. Electric logs indicate 298 feet of gross gas pay in both the Socuy and La Luna formations. The well tested gas flow of 7.9 million cubic ft per day on a 43/64'' choke with a calculated AOF of 20 million cubic ft/day. Compae No. 3 well was spudded on October 1, 1998 and drilled to a total depth of 2501 feet. Electric logs indicated 50 feet of net pay from the La Luna formation. The well tested gas flows of 1 mmcfd through a 1/4'' choke. Quadra has been advised by Texican PLC (the Operator), that they plan to submit an application for Declaration of Commerciality to Ecopetrol, the Colombian state-owned oil and gas company prior to year end. In anticipation of the acceptance of this application, the Operator has commenced a study for the requirements for construction of 40 km gas pipeline tie-in for sales gas production of 25-30 mmcfd commencing mid to late 1999. Quadra has a 10% net revenue interest in the 224,000 acre Maracas concession. Quadra's common shares are quoted for trading on the Canadian Dealing Network under the symbol ''QDRA.U''. As of September 3O, 1998 there are 22,043,400 shares issued and outstanding.

To: Kerm Yerman who wrote (13066)	10/29/1998 5:20:00 AM
From: Kerm Yerman	Respond to of 15196

FINANCING / Scimitar Hydrocarbons Corp - Private Placement and Loan CALGARY, Oct. 28 /CNW/ - Scimitar Hydrocarbons Corporation (''SIY'' - ASE) today announced that it has agreed, subject to regulatory approval, to issue an aggregate 3,750,000 common shares of the corporation on a private placement basis at a price of $0.20 per share for total proceeds of $750,000. Certain insiders of the corporation will subscribe for 1,250,000 ($250,000) of the common shares to be issued. The corporation also announces that a director and principal shareholder of the corporation has agreed to loan the corporation the amount of $250,000, which loan will be secured by a floating charge over the corporation's assets and undertaking. Interest will be paid on the indebtedness at a rate of prime plus 1%. Scimitar minimized the amount of the private placement to avoid significant dilution under soft market conditions. Proceeds raised will be used by the corporation to fulfill ongoing commitments and pursue certain near-term opportunities related to the Issaran, Egypt development.

To: Kerm Yerman who wrote (13066)	10/29/1998 5:22:00 AM
From: Kerm Yerman	Respond to of 15196

CORP. NOTICE / Chieftain International, Inc. Plans to Repurchase Common Shares EDMONTON, Oct. 28 /CNW/ - Chieftain International, Inc. (''CID'') has filed notice with The Toronto Stock Exchange relating to the repurchase by Chieftain of up to 1,200,000 shares, amounting to approximately 9.4% of the public float at the commencement date of the bid. Chieftain will purchase the shares pursuant to a normal course issuer bid undertaken in accordance with the rules and by-laws of the Exchange. Chieftain has been informed that the Exchange has accepted its notice to make the normal course issuer bid. The Company's Board of Directors authorized the bid on the basis of its belief that the market price of the Company's common shares does not accurately reflect their value. Purchases may commence on November 2, 1998 and will terminate on November 1, 1999 or on such earlier date as 1,200,000 shares have been purchased under the bid. Chieftain has purchased and cancelled a total of 312,900 common shares at an average price of $29.95 per share pursuant to a normal course issuer bid commenced on October 31, 1997 and terminating on October 30, 1998. Chieftain International, Inc. is a Canadian company the common shares of which are listed on The Toronto Stock Exchange, The Alberta Stock Exchange and the American Stock Exchange.

To: Kerm Yerman who wrote (13066)	10/29/1998 5:26:00 AM
From: Kerm Yerman	Respond to of 15196

EARNINGS / Encal Energy - For the Nine Months Ended September 30, 1998 Growth Continues - Core Area Strengthened CALGARY, Oct. 28 /CNW/ - Three months ended Nine months ended September 30 September 30 1998 1997 1998 1997 ------------------------------------------------------------------------- Financial ($ thousands except per share amounts) Petroleum and Natural Gas Sales 43,249 38,163 125,386 122,256 Funds From Operations 17,414 17,378 52,166 60,404 Per Common Share - Basic 0.17 0.17 0.50 0.58 - Fully Diluted 0.15 0.16 0.47 0.55 Net Earnings (Loss) (516) 1,369 104 9,470 Per Common Share - Basic 0.00 0.01 0.00 0.09 - Fully Diluted 0.00 0.01 0.00 0.09 Capital Expenditures 39,597 27,223 130,646 86,334 BC Asset Acquisition - - - 45,426 Long Term Debt 214,933 133,338 214,933 133,338 Weighted Average Outstanding Shares (thousands) - Basic 105,711 104,498 105,349 104,307 - Fully Diluted 112,296 110,499 111,205 110,263 Shares Outstanding (thousands) 105,854 104,721 105,854 104,721 ------------------------------------------------------------------------- Operations Production - Natural Gas (mcf/d) 145,683 128,910 140,628 127,574 - Crude Oil (bbls/d) 9,272 7,145 9,076 6,509 - Natural Gas Liquids (bbls/d) 3,453 2,226 2,944 2,353 - Total (BOE/d) 27,293 22,262 26,083 21,619 Pricing (before hedging) - Natural Gas ($/mcf) 1.92 1.60 1.90 1.83 - Crude Oil ($/bbl) 15.63 22.97 16.48 24.73 - Natural Gas Liquids ($/bbl) 13.20 19.99 14.66 21.92 >> To Our Shareholders Highlights - Quarterly average production reaches 27,293 barrels equivalent per day, a gain of 23 percent over the same period one year ago. - The Company has entered into a large-area farmin agreement in west central Alberta to exploit Mississippian Formations using horizontal drilling technology. - Encal announces expansion of its eastern Canada impact exploration program, with participation in the Shoal Point prospect, western Newfoundland West Central Core Area Strengthened Encal continues to focus on building its asset base and operating position within the Company's two core areas. During the third quarter, Encal's position within west central Alberta was strengthened when the Company finalized a regional farmin agreement covering an undeveloped land base exceeding 55,000 gross acres. This farmin provides the opportunity to exploit various Mississippian reservoirs and will result in the drilling of at least eight wells by the end of the first quarter 1999. The farmin terms also provide an economic incentive to test the application of natural gas horizontal drilling technology. In addition, an asset exchange agreement has been executed for significant producing assets and additional undeveloped land in the same region. This asset swap involves the disposition by Encal of minor interest non-operated properties in exchange for an operated, liquids rich, natural gas producing property. This transaction is expected to close in November 1998. Wilson Creek Pipeline Project During the quarter, Encal initiated plans to construct a 25 mile, eight inch diameter sour gas transmission line from the Wilson Creek compressor station to the Gulf operated Rimbey Gas Plant. This pipeline will transport raw gas to an underutilized facility and provide Encal with additional processing capacity for volume growth as the Company exploits its proprietary and farmin acreage. Encal as operator, will participate in the project for a 67 percent share. The pipeline will initially transport 25 mmcf/d net to Encal and will have the potential to be expanded through the additional compression. Application to construct the pipeline has been filed with the Alberta Energy and Utilities Board for regulatory review and approval and a response is expected by mid November. A portion of this gas will flow through various other pipelines prior to the completion of this major project. Core Exploration and Development During the first three quarters of 1998, Encal participated in 119 wells (69.1 net) of which 95 (61.0 net) were drilled within the Company's core activity areas in northeastern British Columbia and west central Alberta. The results included 56 gas wells (27.7 net) and 37 oil wells (20.3 net), yielding a success rate of 78 percent (70 percent net). In the third quarter, the Company enjoyed continued drilling success along the Columbia-Minehead trend in Alberta, where three more wells were cased and completed for Cardium gas production. The Company continues to maintain a substantial inventory of drilling locations on this long-life, high-liquids project. Elsewhere, Encal added two more producers to its Cecil light oil project at Rigel, British Columbia. The Company also commenced an expanded exploitation program of its Mississippian light oil pool at Westerose, Alberta using horizontal drilling technology. The initial results of this program have been very encouraging and at least six more horizontal locations are planned. Encal anticipates an active core area drilling program during the last quarter of 1998 and into the first quarter of 1999, with more than eighty firm and follow-up locations planned. A significant portion of this program is directed towards natural gas prospects in northeastern British Columbia, where the Company will pursue previous drilling success at Redeye, Slave-Gutah, and Prespatou. In addition, the Company will expand its horizontal exploitation program targeting Mississippian Formations in west central Alberta. Key activity areas will include Wilson Creek, Innisfail, Sylvan Lake and Westerose. High Impact Exploration Encal's impact exploration program is structured to complement the Company's core operations in western Canada. The impact program focuses on large-scale natural gas prospects in northeastern British Columbia, moderate size light oil and natural gas prospects in central Alberta, and high risk/high reward concepts in the Gulf of St Lawrence region, eastern Canada. During the third quarter, Encal completed drilling operations on its first two exploratory prospects on Anticosti Island, Quebec, in eastern Canada. Although the Roliff and Jupiter wells failed to encounter a commercial hydrocarbon accumulation, they did provide encouraging stratigraphic information regarding potential reservoirs within the target Ordovician Formations. The Company also participated in the acquisition of approximately four hundred kilometers of new seismic data, principally on the eastern section of the island. This data will be used to identify prospects for the third and fourth wells in the exploration program, to be drilled in 1999 and 2000. In September, Encal announced that it will participate in the Shoal Point K-39 exploration well in western Newfoundland. This well will test a major structural feature approximately 15 miles northeast of the Port au Port No. 1 well, which was drilled in 1995 and tested high quality light oil at rates exceeding 1,700 barrels per day. The Shoal Point well will be drilled from an onshore location utilizing a conventional western Canadian drilling rig, to an estimated total depth of 2,440 meters. Encal will participate for a 37.5 percent working interest. The well is expected to spud in December, 1998. Over the next two quarters, Encal will also drill several impact exploration wells in western Canada, which will test deep prospects at Eskai, British Columbia and at Carbon, Alberta. Production For the nine months ended September 30, 1998, natural gas production increased to 140.6 million cubic feet per day from 127.6 million cubic feet per day during the same period of 1997. Increases in natural gas production are attributable to successful exploration and development activity at Redeye and Wilson Creek, combined with tie in of new wells at Crystal and Cherhill. Oil and NGL production increased 36 percent to 12,020 barrels per day for the nine months ended September 30, 1998 compared to 8,862 barrels per day in 1997 as a result of successful exploration and development activity at Rigel, Redeye, and Cadogan. During the quarter, Encal commenced waterflood operations on the Company's third Cecil oil pool at Rigel, British Columbia. An application to waterflood the fourth pool will be submitted to regulatory authorities during the fourth quarter. Marketing Encal's crude oil prices decreased 33 percent to average $16.48 per barrel during the nine months ended September 30, 1998 compared to $24.73 during the same period in 1997. Natural gas prices increased four percent averaging $1.90 per thousand cubic feet during the nine months ended September 30, 1998 compared to $1.83 per thousand cubic feet in 1997. Natural gas liquids prices decreased 32 percent averaging $14.66 per barrel during the nine months ended September 30, 1998 compared to $21.92 per barrel in 1997. Natural gas prices have continued to show improvement through the third quarter. Strong prices throughout the remainder of 1998 and 1999 are supported by the expectation that Canadian gas supplies will not be sufficient to fill new incremental pipeline capacity scheduled to come on stream this winter. Through physical transactions, Encal has capitalized on the current pricing environment by fixing the price on approximately 20 percent of its 1999 natural gas sales at a blended plant gate price of $2.70 per mcf for the winter and $2.20 per mcf for the summer, yielding an overall 1999 average price of $2.35 per mcf. Oil prices continue to test historical lows, although some relief has been provided by the production cuts pledged by OPEC and non-OPEC producers. Pricing tolerance levels remain uncertain, however these cuts have hopefully established a floor price. Encal has hedged approximately nine percent of its 1998 crude oil production through financial transactions. Financial Petroleum and natural gas sales for the nine months ended September 30, 1998 totaled $125.4 million compared to $122.3 million reported during the same period in 1997. Royalty rates averaged 17.0 percent during the nine months ended September 30, 1998 compared to 18.5 percent during the same period in 1997. The decrease in royalty rates in 1998 is primarily due to higher than expected prior period gas cost allowance deductions and lower crude oil prices. Operating costs averaged $4.37 per barrel of oil equivalent during the nine months ended September 30, 1998 compared to $4.30 per barrel of oil equivalent during the same period in 1997. General and administrative costs decreased four percent, averaging $1.08 per barrel of oil equivalent in 1998 compared to $1.13 in 1997. The unexpected fall in value of the Canadian dollar in relation to the US dollar has impacted 1998 funds from operations with a realized year to date foreign exchange hedging loss of $6.4 million. Year to date net hedging losses including crude oil swaps amount to $3.9 million compared to $2.1 million in 1997. In order to more accurately reflect the quality of Encal's crude oil and natural gas, the Company has adopted a revised presentation which separately discloses hedging results. For the nine months ended September 30, 1998, funds from operations were $52.2 million ($0.50 per share) compared to $60.4 million ($0.58 per share) during the same period of the prior year. Earnings were $104,000 ($0.00 per share) compared to $9.5 million ($0.09 per share) in 1997. Total capital expenditures for the nine months ended September 30, 1998 were $130.6 million compared to $131.8 million for the same period in 1997. Exploration expenditures during the period inclusive of land, seismic, drilling and completions accounted for $76.4 million with an additional $37.5 million incurred on equipment, gathering systems, facilities and injection fluids. During the nine months ended September 30, 1998 the Company has spent $20.4 million on acquisitions of core properties and received $3.7 million from the disposition of non-core properties. Long term debt was $214.9 million at September 30, 1998 compared to $143.4 million at December 31, 1997 and $133.3 million at September 30, 1997. The Company currently has credit facilities of $260 million. Year end debt is forecasted to be approximately $220 million. Outlook Encal's operating results continue to generate growth consistent with previously stated targets. We are pleased with the progress to date and expect a continuation of this trend. As we approach the new gas contract year and the winter heating season, it appears that prior predictions of considerably increased natural gas pricing will prove to be correct. The combination of reduced drilling activity with increased pipeline capacity has the potential to create a gas supply shortfall in Alberta this winter. As a result, Encal will continue to focus on natural gas drilling, while oil drilling over the short term will be limited to development activities at Rigel, B.C. With a borrowing base of $260 million, increasing cash flow from volume growth and improved natural gas pricing during 1999, Encal will be in a strong position to fund a capital expenditure program capable of generating continued growth from our large inventory of internal opportunities. On behalf of the Board David D. Johnson President and CEO October 28, 1998 << Balance Sheets September 30 December 31 ($ thousands) 1998 1997 ------------------------------------------------------------------------- (unaudited) Assets Current Accounts Receivable 22,011 18,366 Inventory 7,731 5,923 ------------------------------------------------------------------------- 29,742 24,289 Petroleum Property and Equipment 568,827 486,541 Deferred Foreign Exchange Losses 7,059 2,706 ------------------------------------------------------------------------- 605,628 513,536 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities and Shareholders' Equity Current Accounts Payable 49,013 34,698 Bank Debt 138,638 71,959 Senior Notes Payable 76,295 71,455 Site Restoration and Reclamation 9,090 8,233 Deferred Income Taxes 51,558 49,737 ------------------------------------------------------------------------- 275,581 201,384 ------------------------------------------------------------------------- Shareholders' Equity Share Capital 247,985 244,509 Retained Earnings 33,049 32,945 ------------------------------------------------------------------------- 281,034 277,454 ------------------------------------------------------------------------- 605,628 513,536 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Statements of Earnings Nine Months Ended September 30 (unaudited, $ thousands except per share amounts) 1998 1997 ------------------------------------------------------------------------- Revenues Petroleum and Natural Gas Sales 125,386 122,256 Royalties 20,661 22,261 Hedging Losses 3,947 2,071 ------------------------------------------------------------------------- 100,778 97,924 ------------------------------------------------------------------------- Expenses Production 31,082 25,372 General and Administrative 7,693 6,649 Financing Charges 9,291 4,932 Depletion and Depreciation 49,770 41,900 ------------------------------------------------------------------------- 97,836 78,853 ------------------------------------------------------------------------- Earnings Before Income Taxes 2,942 19,071 ------------------------------------------------------------------------- Income Taxes Deferred 1,017 9,034 Large Corporation Tax 1,821 567 ------------------------------------------------------------------------- 2,838 9,601 ------------------------------------------------------------------------- Net Earnings 104 9,470 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Earnings per Share Basic 0.00 0.09 Fully Diluted 0.00 0.09 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Statements of Changes in Financial Position Nine Months Ended September 30 (unaudited, $ thousands except per share amounts) 1998 1997 ------------------------------------------------------------------------- Operating Activities Net Earnings 104 9,470 Depletion and Depreciation 49,770 41,900 Deferred Income Taxes 1,821 9,034 Amortization of Deferred Foreign Exchange Losses 471 - ------------------------------------------------------------------------- Funds from Operations 52,166 60,404 Change in Non-Cash Working Capital (2,654) 4,129 ------------------------------------------------------------------------- 49,512 64,533 ------------------------------------------------------------------------- Financing Activities Bank Debt 66,679 69,292 Senior Notes Payable 16 - Common Shares 3,476 2,283 ------------------------------------------------------------------------- 70,171 71,575 ------------------------------------------------------------------------- Investing Activities Petroleum Property and Equipment (134,353) (158,370) Sales of Petroleum Property and Equipment 3,707 26,610 Site Restoration and Reclamation (553) (795) Change in Non-Cash Working Capital 11,516 (3,553) ------------------------------------------------------------------------- (119,683) (136,108) ------------------------------------------------------------------------- Change in Cash - - ------------------------------------------------------------------------- ------------------------------------------------------------------------- Funds from Operations per Share Basic 0.50 0.58 Fully Diluted 0.47 0.55 ------------------------------------------------------------------------- -------------------------------------------------------------------------

To: Kerm Yerman who wrote (13066)	10/29/1998 5:29:00 AM
From: Kerm Yerman	Read Replies (10) \| Respond to of 15196

FIELD ACTIVITIES / Devlan Exploration Company Ltd. Kicks Off Winter Drilling Program CALGARY, Oct. 28 /CNW/ - DEVLAN EXPLORATION COMPANY LTD. recently acquired 2,880 undeveloped acres in the Lethbridge area and received EUB approval to drill two wells at 01-11-10-21-W4 and 04-01-10-21-W4. The Company spudded the first well on October 28, 1998 and expects to spud the second well prior to November 1, 1998. These two wells are the first stage of Devlan's nine-well winter drilling program and are expected to produce at rates similar to an adjacent well that has been production tested at 525 mcfd. The Company's focus in this first stage is to develop the recently acquired acreage and to expand its presence in the area. Production from these wells and a third, optioned well will be brought on stream and tied-in by January 1, 1999. The Company expects the first stage of the program to bring on between 750 and 1,250 mcfd, resulting in a 1998 exit rate of 3,000 to 3,500 mcfd. The second stage of the program will focus on Devlan's Iron Springs property. The Company presently has 7,300 undeveloped acres in the area and has identified seven drilling prospects to be developed early in 1999. As a result of Devlan's comprehensive experience in the area and the data gathered from previous drilling programs, the Company will employ under-balanced drilling technology for this program, This will increase the reserve life and enhance the deliverability of the reservoirs. As Devlan continues to develop and expand its core areas, this technology will be applied to other prospects. Devlan exploration EVLAN EXPLORATION COMPANY LTD. is a Calgary based oil and natural gas company focused on asset enhancement and optimization of previously overlooked or underachieving properties. Devlan's exploration and production activity is concentrated on natural gas prospects in Alberta.