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

To: Kerm Yerman who wrote (13281)	11/6/1998 12:10:00 PM
From: Kerm Yerman	Respond to of 15196

IN THE NEWS / Losses Mount At Canada's Ranger Oil CALGARY, Nov 5 - Losses deepened at Canada's Ranger Oil Ltd. <RGO.TO> on Thursday as the company was stung by depressed crude oil prices and a writedown in the value of part of its Angolan exploration and production operations. Calgary-based Ranger, which has been warning investors of red ink for much of the year, posted a third-quarter net loss of $54.7 million or $0.43 a share, worsening from a loss of $5.9 million or $0.06 a share in 1997. Of the total loss, $38.8 million represented the writedown of an exploration block off the coast of Angola, which includes the company's Kiame field, which started producing oil this year. Ranger decided to stop exploring for more oil on that concession so it could concentrate on a deeper offshore Angola block with potentially richer oil deposits, Ranger Vice-President John Faulds said. Cash flow, a key indicator of an oil company's ability to fund upcoming projects, rose slightly in the third quarter to $31.3 million from $30.5 million the year before. However, cash flow per share sank to $0.25 from the previous $0.31 because Ranger issued more stock last year to pay for its acquisition of heavy oil producer ELAN Energy. Revenues totaled $79 million, up from $72 million in the third quarter of 1997. Ranger is one of Canada's biggest international oil explorers, with operations in the North Sea, Angola, the U.S. Gulf of Mexico as well as at home. Analyst Ken Faircloth, of Goepel McDermid in Calgary, said the results came as no surprise as Ranger had served notice 1998 would be fraught with red ink amid low prices for crude oil, especially Canadian heavy oil, and an increase in spending on soon-to-be-producing fields in the North Sea. "They are right on target for the cash flow. For the earnings, the Angola writeoff will hurt (the projection)," Faircloth said. Pressuring results was a 35 percent drop in its average oil sales price, with some of the reduction caused by weak world markets and the rest from the addition of ELAN's heavy oil. Tar-like Canadian heavy oil has traded at a deep discount to light crude because it is more expensive to refine into gasoline and other petroleum products than light oil. Ranger has turned off the taps on more than 35 percent of its heavy crude production because returns have been too low, although it said on Thursday that prices, while still weak, improved by 69 percent from last year due to a narrower discount. Oil production during the third quarter nearly doubled to 57,566 barrels a day, largely because of the addition of ELAN's output and the spring startup of the offshore Angola production from Kimae, which is now 7,192 barrels a day. Natural gas output, meanwhile, was off nearly 18 percent to 133 million cubic feet a day after Ranger sold some Canadian producing properties in northeastern British Columbia. Faulds said the company's Banff and Pierce oil fields in the British North Sea would start production in December and January, resulting in average 1999 production rising about 45 percent from this year to 80,000 barrels a day. Ranger shares on the Toronto Stock Exchange closed up C$0.20 at C$10.65 on Thursday.