EARNINGS / Pendaries Petroleum Ltd. Releases 3rd Quarter 1998
Results
TSE SYMBOL: PDQ
AMEX SYMBOL: PDR
NOVEMBER 13, 1998
TORONTO, ONTARIO--Pendaries Petroleum Ltd. reports its financial
results for the three months and nine months ended September 30,
1998 as follows (all figures in U.S. dollars unless otherwise
noted):
/T/
ASSETS SEPTEMBER DECEMBER
30, 1998 31, 1998
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CURRENT ASSETS $ 8,998,233 $15,364,985
NET PROPERTY AND EQUIPMENT 20,230,705 16,134,591
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TOTAL ASSETS $29,228,938 $31,499,576
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LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES $ 60,779 $ 275,951
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SHAREHOLDERS' EQUITY:
Common Shares Issued
8,781,970 and 8,726,470
common shares, respectively 32,501,842 32,328,761
Cumulative translation
adjustment - 4,180
Retained deficit (3,333,683) (1,109,316)
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TOTAL SHAREHOLDERS' EQUITY 29,168,159 31,223,625
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TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $29,228,938 $31,499,576
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Three Months Nine Months
Ended Ended
September 30, September 30,
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1998 1997 1998 1997
---------------- ----------------
REVENUE:
Oil and Gas $165,014 $176,418 $380,732 $411,070
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EXPENSES:
Oil and Gas
Operating
Expenses 33,528 42,859 125,182 104,659
General
Administrative
Expenses 596,371 492,381 1,799,431 1,406,179
Depreciation,
Depletion &
Amortization 86,625 78,409 266,623 247,369
Exchange (gain)
loss 132,514 685 103,575 34,493
Write-off of
Registration
Costs 299,397 - 299,397 -
Stock option
Settlement - - 450,000 -
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1,148,435 614,334 3,044,208 1,792,700
OTHER INCOME:
Interest Income 118,290 200,411 439,109 712,184
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LOSS BEFORE INCOME
TAXES (865,131) (237,505) (2,224,367) (669,446)
RECOVERY OF INCOME
TAXES - 83,127 - 234,306
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NET LOSS $(865,131) $(154,378) (2,224,367) (435,140)
RETAINED DEFICIT,
Beginning of
period (1,109,316) (224,975)
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RETAINED DEFICIT,
End of period $(3,333,683) $(660,115)
------------ ----------
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NET LOSS PER SHARE:
Basic $(.10) $(.02) $(.25) $(.05)
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------ ------ ------ ------
Fully diluted $(.10) $(.02) $(.25) $(.05)
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/T/
THREE MONTHS ENDED SEPTEMBER 30, 1998:
The Company incurred a net loss of $865,131 and $154,378 for the
quarter ended September 30, 1998 and 1997, respectively, as a
result of the following:
Oil and gas income from the Company's properties located in
Alberta, Canada decreased from $176,418 in the third quarter ended
September 30, 1997 to $165,014 for the same period in 1998. The
$11,404 decrease was due to lower oil and natural gas prices.
Oil and gas operating expenses and depreciation, depletion and
amortization do not differ materially for the third quarter of
1997 and the same period in 1998.
General and administrative expenses increased from $492,381 in the
third quarter of 1997 to $596,371 in the third quarter of 1998.
The $103,990 increase was due primarily to increased salaries and
staff costs associated with the Company's registration with the
U.S. Securities and Exchange Commission and its listing on the
American Stock Exchange.
The Company incurred an exchange loss of $132,514 in the third
quarter of 1998 as compared to $685 in the same period in 1997.
The losses were recorded in consolidation due to the strength of
the U.S. dollar as compared to the Canadian dollar.
In the third quarter of 1998, the Company wrote off costs of
$299,397 associated with its registration with the U.S. Securities
and Exchange Commission. These costs were incurred primarily in
the first and second quarters of 1998 and were deferred on the
balance sheet as "Prepaid Expenses and Other Assets" in
anticipation of an offering of securities in the U.S. and Canada.
The Company has elected to indefinitely postpone the offering and
has, therefore, charged these registration costs to expense.
Interest income decreased by $82,121 from $200,411 in the third
quarter of 1997 to $118,290 in the third quarter of 1998. The
decrease was due to the reduction of cash available for investment
in 1998.
The Company recorded a recovery of income taxes of $83,127 in the
third quarter of 1997. The Company follows Accounting
Recommendation Section 3465, "Income Taxes" of the Handbook of the
Canadian Institute of Chartered Accountants and determined that
the loss incurred in the third quarter of 1998 did not meet the
criteria promulgated in Section 3465 to record a future income tax
asset.
NINE MONTHS ENDED SEPTEMBER 30, 1998:
The Company incurred a net loss of $2,224,367 and $435,140 for the
nine months ended September 30, 1998 and 1997, respectively, as a
result of the following:
Oil and gas income from the Company's properties located in
Alberta, Canada decreased from $411,070 in the nine months ended
September 30, 1997 to $380,732 for the same period in 1998. The
$30,338 decrease was due to lower oil and natural gas prices.
Oil and gas operating expenses and depreciation, depletion and
amortization were essentially comparable for the first nine months
of 1997 and the same period in 1998.
General and administrative expenses increased from $1,406,179 in
the first nine months of 1997 to $1,799,431 in the first nine
months of 1998. The $393,252 increase was due primarily to
increased salaries and an increase in staff and costs associated
with the Company's registration with the U.S. Securities and
Exchange Commission and its listing on the American Stock
Exchange.
The Company incurred an exchange loss of $103,575 in the first
nine months of 1998 as compared to $34,493 in the same period in
1997. The losses occurred due to the strength of the U.S. dollar
as compared to the Canadian dollar.
As explained in the third quarter section, the Company wrote off
costs of $299,397 associated with its registration with the U.S.
Securities and Exchange Commission.
During the nine months ended September 30, 1998, the Company
settled litigation with the former President of its wholly owned
subsidiary, Sino-American Energy Corp., over the number of stock
options to which the former president was entitled, and in April
1998, the parties entered into a Settlement Agreement pursuant to
which the former president received $450,000 and agreed to execute
a new Stock Option Agreement reflecting a grant of 100,000 stock
options (the number of stock options the Company claimed had
originally been granted) and, with the exception of certain
restrictions not imposed on other option holders, containing terms
substantially similar to those contained in the Stock Option
Agreements of all other option holders who had been granted
options prior to 1996. The $450,000 settlement amount was charged
to expense.
Interest income decreased by $273,075 from $712,184 in the first
nine months of 1997 to $439,109 in the first nine months of 1998.
The decrease was due to the reduction of cash available for
investment in 1998.
The Company recorded a recovery of income taxes of $234,306 in the
first nine months of 1997. The Company follows Accounting
Recommendation Section 3465, "Income Taxes" of the Handbook of the
Canadian Institute of Chartered Accountants and determined that
the loss incurred in the first nine months of 1998 did not meet
the criteria promulgated in Section 3465 to record a future income
tax asset. |
