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

To: Kerm Yerman who wrote (13573)	11/17/1998 9:01:00 PM
From: Herb Duncan	Respond to of 15196

FIELD ACTIVITIES / International Frontier Resources Announces Australian Farmout and 3D Seismic Survey ASE SYMBOL: IFR NOVEMBER 17, 1998 CALGARY, ALBERTA--International Frontier Resources ("IFR") today announced that IFR has entered into a Farmout Agreement with Coveyork Pty. Limited ("Coveyork") covering IFR's Northwest Shelf Australian permit WA-274-P ("Permit"). Under the terms of the Farmout Agreement Coveyork will fund the costs to acquire 4,700 kilometers of 2D seismic and 425 square kilometers of 3D seismic. Coveyork will fund 100 percent of the direct seismic costs, or $5,000,000 (U.S.) whichever is lesser, to earn an 87.50 percent interest in the Permit. The agreement grants IFR the option to re-acquire an additional 12.50 percent interest in the Permit from Coveyork by IFR reimbursing Coveyork for 12.50 percent (plus interest) of the direct seismic costs incurred by Coveyork. IFR's option to increase to a 25 percent interest is exercisable at anytime prior to August 19, 2000. The company also announces that IFR and Coveyork have executed a Data Use License Agreement covering Schlumberger GECO-PRAKLA's North Browse 3D seismic survey. The offshore seismic survey consists of over 10,000 square kilometers of 3D seismic, the largest non-exclusive 3D seismic survey to date in the Australasian region. The seismic survey covers the entire Japex AC, Ltd.'s AC/P29 permit and a very large portion IFR/Coveyorks' permit WA-274-P, BHP's AC/P30 and West Oils AC/P28 permit. Initially 2,355 square kilometers of 3D seismic will be acquired on IRF/Coveyorks' permit with potential for further expansion. The agreement with GECO-PRAKLA allows IFR and Coveyork to license additional 3D seismic coverage at favorable rates in the future. Acquisition of the North Browse TQ3D survey commenced in October 1998 and is schedule to be completed in the second quarter 1999. By participating in the survey IFR/Coveyork can now fast-track work programs and further evaluate drillable prospects identified on 2D seismic. Coveyork is an indirect subsidiary of Genting Berhad, a company incorporated in Malaysia and whose shares are publicly traded on the Kuala Lumpur Stock Exchange. IFR is a newly listed company trading on the Alberta Stock Exchange under the symbol IFR.

To: Kerm Yerman who wrote (13573)	11/17/1998 9:03:00 PM
From: Herb Duncan	Respond to of 15196

FIELD ACTIVITIES / Scorpion Energy Corporation Production Update TSE SYMBOL: SEN NOVEMBER 17, 1998 CALGARY, ALBERTA--Scorpion Energy's play at Beg continues to develop. The recently completed Blue Range et al Beg B-57-I / 94-B-16 well in Beg, B.C. was put on production November 11, 1998 at a rate of 2.5 mmcf/d (625 mcf/d net to Scorpion). The a-83-H well (SEN 22 percent working interest carried through completion) will be drilled prior to year end. Exclusive of shut in production, this brings Scorpion's current production to 8.0 mmcf/d and 400 bbl/d oil (1200 BOE/d). A non-operated well at Sturgeon Lake was shut in by regulatory officials in September. The EUB has now made a ruling on this matter. A good production practice order has been approved and 95 bbl/d of 38 degree API oil net to the company will be turned back on January 1, 1999. The company's Nisku production at Brazeau was shut in due to plant limitations in September. This Nisku I Pool production (1.0 mmcf/d and 50 bbl/d oil net to Scorpion) is scheduled to be back on production by December 15, 1998.

To: Kerm Yerman who wrote (13573)	11/17/1998 9:04:00 PM
From: Herb Duncan	Respond to of 15196

FINANCING / Penn West Announces Completion of Previously Reported Equity Issue TSE SYMBOL: PWT NOVEMBER 17, 1998 CALGARY, ALBERTA-- NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES PENN WEST PETROLEUM LTD. (TSE - PWT) announces today that it has completed the previously reported equity issue of 4 million common shares at a price of $20.00 per share on a bought-deal basis for gross proceeds of $80 million. The equity issue was completed with a group of underwriters led by FirstEnergy Capital Corp., and including CIBC Wood Gundy Securities Inc., RBC Dominion Securities Inc., Peters & Co. Limited, Nesbitt Burns Inc., ScotiaMcleod Inc., TD Securities Inc., Research Capital Corporation, and Sprott Securities Limited. The net proceeds will be used to finance the Corporation's ongoing exploration, development and acquisition programs during 1998 and 1999. Until so required, the net proceeds will initially be applied to reduce the Corporation's bank indebtedness. Penn West Petroleum Ltd. is a Calgary based oil and natural gas company that focuses on exploration and development activity in Western Canada. Penn West trades on The Toronto Stock Exchange under the symbol "PWT". 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.

To: Kerm Yerman who wrote (13573)	11/17/1998 9:05:00 PM
From: Herb Duncan	Respond to of 15196

FINANCING / Benz Obtains New Financing VSE SYMBOL: BZG NOVEMBER 17, 1998 HOUSTON, TEXAS--Benz Energy Ltd. today announces that it has obtained an additional $2 million in financing from its current senior secured lenders. In addition, the company's $12 million secured credit facility with a partnership affiliated with EnCap Investments L.C. has been extended in maturity to Feb. 28, 1999. Robert S. Herlin, chief financial officer and senior vice president, commented, "The additional funding will be utilized to complete the Howell No. 1 and Fortenberry No. 1 development wells currently drilling at our Oakvale Dome Field in Mississippi. Both wells are expected to reach their total depth of 16,500 feet in the next three to four weeks. The extension of the maturity date gives us more time to complete an optimal long-term finance package to replace the EnCap facility and to fund our 1999 program." Benz Energy Ltd. is an exploration and development company based in Houston, focused on natural gas in the onshore region of the U.S. Gulf Coast of Texas, Mississippi and Louisiana. Cautionary Statement as to Forward-Looking Information Investors are cautioned that the preceding statements of the company include certain estimates, assumptions and other forward-looking information ("forward-looking statements (information)"). The actual future performance, developments and/or results of the company may differ materially from any or all of the forward-looking statements (information), which include current expectations, estimates and projections, in all or part attributable to general economic conditions and other risks, uncertainties and circumstances partly or totally outside the control of the company, including rates of inflation, natural gas prices, reserve estimates, drilling risks, future production of oil and gas, changes in future costs and expenses related to oil and gas activities and hedging, financing availability and other risks related to financial activities. The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release.

To: Kerm Yerman who wrote (13573)	11/17/1998 9:07:00 PM
From: Herb Duncan	Respond to of 15196

EARNINGS / Northrock Resources Ltd. Announces Nine Month Results TSE SYMBOL: NRK NOVEMBER 17, 1998 CALGARY, ALBERTA--NORTHROCK RESOURCES LTD. ("Northrock") is pleased to announce its unaudited financial and operating results for the nine months ended September 30, 1998. The third quarter of 1998 met the Company's projections and was highlighted by a 66 percent increase in natural gas production to 115.6 million cubic feet per day. In addition, a very active and successful exploration and development program has grown the Company's reserves by more than 25 million barrels of oil equivalent ("BOE") at a cost of $6.00 per BOE. Northrock's production continues to grow aggressively, from a third quarter average of 21,007 BOE per day, to a current rate of approximately 25,000 BOE per day, with more than 4,000 BOE per day of behind pipe capability. With the planned capital program for the remainder of 1998, the Company is on track to exit 1998 at production rates in excess of 27,000 BOE per day with further significant production growth anticipated into 1999. /T/ Three Months Ended Nine Months Ended September 30, September 30, ------------------ ----------------- Financial Summary ----------------- (000's except per Percent share amounts) 1998 1997 1998 1997 Change ------- ------- -------- ------- ------- Gross Production Revenue $34,100 $24,496 $103,183 $76,203 +35 Cash Flow from Operations 11,642 11,365 39,840 35,992 +11 Per Common Share 0.36 0.47 1.37 1.56 -12 Net Earnings 78 2,313 2,181 8,450 -74 Per Common Share 0.00 0.10 0.08 0.37 -78 Capital Expenditures 59,972 30,642 151,556 132,715 +14 Acquisitions 22,784 - 150,962 - N/A Sale of Properties - - - 43,256 N/A Long Term Debt 276,230 124,917 +121 Weighted Average Number of Common Shares 29,030 23,073 +26 Operating Summary ----------------- Production Oil and Liquids (Bbls/d) 9,444 6,790 9,298 6,390 +46 Natural Gas (Mmcf/d) 115.6 69.7 107.2 67.6 +59 BOE (Bbls/d) 21,007 13,762 20,020 13,149 +52 Prices Oil and Liquids ($/Bbl) $16.75 $22.68 $18.01 $24.00 -25 Natural Gas ($/Mcf) $ 1.83 $ 1.61 $ 1.96 $ 1.86 +5 BOE ($/Bbl) $17.70 $19.35 $18.87 $21.23 -11 /T/ Northrock has had a record level of drilling activity and reserve additions in 1998. The Company has maintained a very active program as up to 28 rigs were operating in October 1998, including over 15 rigs on the Gulf Canada Strategic Alliance area in West Central Alberta. The drilling activity in 1998 has resulted in numerous new pool discoveries in both of the Company's natural gas focus areas, with particular success on larger scale Mississippian initiatives. In West Central Alberta and Northwest Alberta new natural gas pools have been discovered at Bigoray, Ferrier, North O'Chiese, Brazeau, Judy Creek and Knopcik. These new discoveries provide Northrock with a significant base for future natural gas production growth. For the first nine months of 1998 gross production revenue increased 35 percent to $103.2 million from $76.2 million for the same period in 1997, primarily as a result of a 52 percent increase in crude oil and natural gas production. Financial results were significantly impacted by lower crude oil prices as cash flow from operations increased by only 11 percent to $39.8 million or $1.37 per common share while net earnings decreased 74 percent to $2.2 million or $0.08 per common share. Natural gas production for the first nine months of 1998 increased 59 percent to average 107.2 million cubic feet per day. Natural gas prices remained strong averaging $1.96 per thousand cubic feet compared to $1.86 per thousand cubic feet realized in the first nine months of 1997. Natural gas prices continue to strengthen in the fourth quarter. Northrock anticipates an average realized natural gas price during the fourth quarter of more than $2.65 per thousand cubic feet. Crude oil and liquids production increased 46 percent, while prices decreased 25 percent to average $18.01 per barrel from $24.00 per barrel for the first nine months of 1997. Despite the reduction in crude oil pricing, netbacks on a BOE basis for the nine months ended September 30, 1998 decreased by only 14 percent to $10.64 from $12.42 in 1997. Approximately 70 percent of the 1998 capital expenditure program was attributable to drilling and completions. The Company's exploration and development program has generated reserve additions of over 25 million BOE during the first nine months, 80 percent of which were related to natural gas activities. In addition to a very active capital program, Northrock successfully completed the acquisition of Landin Resources Ltd. in August 1998 for $22.8 million. The acquisition included incremental working interests in key West Central Alberta natural gas properties where Northrock is proceeding with aggressive exploration and development. Northrock participated in drilling 160 gross (96.0 net) wells during the first nine months of 1998, including 94 exploration wells. The Company's drilling program had an overall success rate of 74 percent. Drilling activity during the third quarter of 1998 totaled 48 gross (28.3 net) wells at a 77 percent success rate and included 15 successful exploration wells. The Company is planning to drill approximately 230 wells in 1998. Northrock continues to have excellent drilling results that will provide the basis for rapid and efficient production growth. A strong financial position and increased cash flow, as a result of production growth and improved natural gas prices, will allow the Company to maintain a very aggressive ongoing capital program. With over 4,000 barrels of oil equivalent per day of current behind pipe capability and a high level of drilling opportunities, Northrock is in an excellent position to grow and expand in 1999 and beyond. Northrock is an oil and gas company listed on The Toronto Stock Exchange trading under the symbol "NRK".

To: Kerm Yerman who wrote (13573)	11/17/1998 9:09:00 PM
From: Herb Duncan	Respond to of 15196

CORP / Canadian 88 Energy Announces Production Ramp-up With Start-up of Waterton Production and Completion of Olds Gas Plant Expansion TSE, ASE, AMEX SYMBOL: EEE NOVEMBER 17, 1998 CALGARY, ALBERTA--Canadian 88 Energy Corp. of Calgary, Alberta, announced today that it has successfully completed the construction of its 27 mile Waterton natural gas gathering system with production having commenced into Shell Canada's Waterton Gas Plant in the foothills of southwest Alberta. The Company said in Calgary today that all six wells drilling into its deep Devonian and Mississippian natural gas play have been tied-in to its 27 mile 10 inch foothills gas gathering system connecting to Shell Canada's Waterton Plant. The gathering system is capable of transporting approximately 110 mmcf/d of new raw gas production from the area and production from the wells is expected to average approximately 15 mmcf/d per well. Canadian 88 said that it is pleased to report that the first well to be placed onstream, Canadian 88 well L.S.D. 4, Sec. 19, Twp. 7, Rge. 2 W5M is producing through a restricted choke at a stabilized rate of 18.5 mmcf/d from the Mississippian formation with an H2S content of less than 1.0 percent. The remaining five wells drilled to date on the play are expected to be placed on production over the next two to three weeks as Shell Canada completes scheduled turn-around and routine plant maintenance at its Waterton facility. A seventh well located on Canadian 88's deep foothills natural gas play is currently drilling ahead without difficulty at Waterton on L.S.D. 6 of Sec. 24, Twp. 7, Rge. 3 W5M to a true vertical depth of 3,935 meters (12,910 feet) targetting the Mississippian formation with a horizontal leg of up to 800 meters (2,624 feet) at the north end of the play. Drilling operations on this development well are expected to be completed by yearend with tie-in operations to follow immediately thereafter. Canadian 88's Waterton natural gas discovery has proved-up natural gas reserves estimated to be in excess of 500 Bcf and the discovery has evolved as one of the largest natural gas discoveries in the foothills of Western Canada in the last ten years. In other developments, Canadian 88 also announced today that it is pleased to report that it has completed Phase I of its 50 mmcf/d expansion of its 70 mmcf/d 100 percent owned Olds/Crossfield gas processing facilities. The Company said that it has completed the addition of 20 mmcf/d of new raw gas processing capacity at its Olds/Crossfield facilities at a cost of approximately $10 million and new shut-in production is currently being tied-in to fill the expanded facility prior to year end. A multi-well drilling program is currently being conducted by Canadian 88 on the Company's Olds/Crossfield holdings which represent the largest 100 percent owned contiguous property in Western Central Alberta. Canadian 88 in association with Western Geophysical Company recently completed the largest 3-D seismic program ever shot in Canada comprising over 400 square miles of high resolution 3-D seismic shot over 120 100 percent owned Canadian 88 sections of land and surrounding lands in this highly prospective multi-zone area. Canadian 88 Energy Corp. (EEE) is an independent public oil and gas company with head offices in Calgary, Alberta, Canada. Canadian 88 has a 100 percent working interest at Olds/Crossfield and the Waterton play is being developed 100 percent by Canadian 88 Energy Corp. with Prize Energy Inc. (PZI - Alberta Stock Exchange) having a 10 percent carried interest in six out of seven wells in the project. The shares of Canadian 88 Energy Corp. are traded on the Toronto, Alberta and American Stock Exchanges.

To: Kerm Yerman who wrote (13573)	11/17/1998 9:11:00 PM
From: Herb Duncan	Respond to of 15196

PIPELINES / American Eco Buys Out Balance Of Trans Canada Pipeline Joint Venture TSE SYMBOL: ECX NASDAQ SYMBOL: ECGOF NOVEMBER 17, 1998 HOUSTON, TEXAS--AMERICAN ECO CORPORATION announced today that it has purchased the balance of the interest held by the Steen Pipeline subsidiary of Dominion Bridge in American Eco's joint venture to install 54 miles of 42" high pressure pipe for Trans Canada Pipelines. This purchase is retroactive to the beginning of the project on June 15th, 1998, giving American Eco 100 percent of the revenue and income from the project. The contract for US$47.0 million is expected to be substantially complete at the end of November. American Eco indicated that the Receivers for Steen Contractors, Ltd. wished to windup liquidation of the assets and made a favorable offer to American Eco to acquire the Steen position. The buyout price was undisclosed. American Eco is a leading North American provider of single-source industrial support and specialty fabrication services in the energy, pulp and paper, and power generating industries. This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the company believes that its expectations are based on reasonable assumptions, it can give no assurance that such expectations will be achieved. Important factors that could cause actual results to differ materially from those in the forward looking statements made herein include the ability of the company to continue to expand through acquisitions, the availability of capital to fund the company's expansion program, the ability of the company to manage its expansion effectively, economic conditions that could affect demand for the company's services, the ability of the company to complete projects profitably and severe weather conditions that could delay projects. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date on which such statements are made. The company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the company.

To: Kerm Yerman who wrote (13573)	11/17/1998 9:14:00 PM
From: Herb Duncan	Respond to of 15196

ENERGY TRUSTS / APF Energy Trust Prices New Issue TSE SYMBOL: AY.UN NOVEMBER 17, 1998 CALGARY, ALBERTA--APF Energy Trust announced today that its new issue of trust units will be priced at $8.00 per unit. This represents a discount of approximately 5 percent to the average closing price since the trust filed the preliminary prospectus on September 25, 1998. Closing is expected to occur on or about December 1, 1998. The offering is being sold through a syndicate led by Research Capital Corporation and including Lévesque Beaubien Geoffrion Inc., HSBC James Capel Canada Inc. and First Marathon Securities Limited.

To: Kerm Yerman who wrote (13573)	11/17/1998 9:17:00 PM
From: Herb Duncan	Respond to of 15196

PROPERTY ACQUISITION / Newport Announces Acquisition TSE SYMBOL: NPP NOVEMBER 17, 1998 CALGARY, ALBERTA--NEWPORT PETROLEUM CORPORATION announces that it has acquired a 7.917 percent working interest in the Caroline Swan Hills Gas Unit No. 1 and Caroline Gas Facilities from Union Pacific Resources Group Inc. A purchase and sale agreement has been signed, subject to standard terms and conditions, with the closing planned for January 15, 1999. The acquisition may be subject to right of first refusal provisions which, if exercised, could reduce Newport's interest in the property. The effective date of the acquisition will be January 1, 1999. The Caroline Swan Hills "A" pool, discovered in 1986, is one of the largest sour gas pools in Western Canada, and is currently producing at 370 mmcf/d of raw gas resulting in 120 mmcf/d of sales gas, 24,875 bbl/d of condensate, 33,340 bbl/d of natural gas liquids and 5,170 tonnes per day of sulphur. Original gas in place for the pool is estimated at 2.4 trillion cubic feet with raw recoverable gas of 2.1 trillion cubic feet. To the end of September 1998, 628 billion cubic feet of raw gas has been produced. The reserve life index for the Unit at current production rates is over 12 years. The Shell Caroline Gas Plant and Facilities were completed in 1993 at a total cost of $1 billion. The Caroline Facilities include 14 producing wells, the gathering and inlet system, the gas treating, deep cut and sulphur plants, and the sulphur forming facilities. Operating costs for the Unit are about $2.00 per boe and, in spite of low oil prices, the property has excellent netbacks. Assuming that all the interests are acquired by Newport, the purchase price will be $165 MM. Excluding $20.0 million allocated to plant facilities based on potential third party processing fees, once the Unit production declines, the acquisition price represents a reserve cost of $7.77 per boe for 39.5 bcf of sales gas reserves and 14.7 million barrels of natural gas liquids reserves. In addition, 1.59 million tonnes of sulphur reserves will also be acquired. Net production volumes for 1999 are forecasted to be 9.0 mmcf/d of sales gas, 1,850 bbl/d of condensate, 2,425 bbl/d of natural gas liquids and 386 tonnes per day of sulphur which are being acquired for a price of $28,000 per producing boe. Assuming an oil price of US$15.00 WTI and a gas price of C$2.25/mcf, the forecasted net cash flow for 1999 is $23.0 million. The Caroline Swan Hills "A" Pool is located 8 kilometres east of Newport's Caroline Beaverhill Lake "B" Pool discovery. To date, 5 wells have been drilled in the "B" Pool and the Company's independent engineers have booked over 500 gross bcf of gas in place. Newport has submitted a detailed development plan to the Alberta Energy and Utilities Board and is currently seeking approval to drill 3 additional wells and complete a one mile tie in to allow an extended production test of one of the wells in the pool. The composition of the gas in the "B" Pool is similar to that of the "A" Pool and contains high levels of hydrogen sulphide and natural gas liquids. Newport recently farmed in on 5.5 sections of land offsetting the discovery and has committed to drill a 100 percent working interest well to earn the lands. In addition, the Company has tied up, under a seismic review option, 90 sections of undeveloped land in the area from a major company. A detailed review of these lands is expected to lead to a number of new plays in the Caroline area. From an initial purchase of 4 sections of Crown land in mid 1996 to today's announcement, the Company has been focused on building its assets in this area and now has an interest in over 120 sections of land and has an option to earn an additional 95 sections. Newport's discovery, combined with this latest acquisition, together with its large undeveloped land base in the area, makes this a major core area for the Company. Access to sour gas facilities is a key issue in developing sour gas in this area. As a working interest owner in the Shell Caroline Gas Plant, Newport will have input concerning the possibility of processing "B" Pool gas in this facility. In conjunction with this transaction, the Board of Directors has approved a 1999 capital budget of $285 million. This exploration and development portion of the budget is unchanged from the $135 million planned prior to the acquisition. It is anticipated that an additional $25 million of property acquisitions will be completed along with up to $40 million of property dispositions in 1999. An equity issue will not be required as the 1999 capital program will be financed from cash flow and increased bank lines of credit with the year end debt forecasted to be about 2.4 times the 1999 cash flow. Newport remains a well capitalized, intermediate-sized producer in Western Canada focused on adding value through high impact exploration, development and strategic acquisitions. Uldis Upitis, Chairman and CEO, comments, "This transaction represents a unique opportunity to acquire a significant working interest in one of the premier gas pools and sour gas plants in Western Canada. With the recent developments in the sour gas processing area of our business, an interest in this facility right on top of our major sour gas discovery is strategic for the Company. Newport will continue to be an active explorer in the deeper part of the basin in Western Canada where large reserves have yet to be discovered." Note: A land plat showing Newport's working interest and option lands, the Caroline Unit lands and the location of the Shell Caroline Gas Plant is also available on the Company's website: www.newportpet.com. As a follow up to this release Newport has scheduled a conference call for 9:00 a.m. Eastern Standard Time on Wednesday November 18th to discuss this acquisition, the third quarter 1998 results and the outlook for 1999. The dial in number for the conference call is: 1-800-521-7392. If you are unable to participate in the conference call, the audio playback number is 1-800-558-5253, reservation number 1888889, and will be available from 12:00 p.m. November 18th to 11:59 p.m. November 20th.

To: Kerm Yerman who wrote (13573)	11/17/1998 9:18:00 PM
From: Herb Duncan	Respond to of 15196

EARNINGS / Part 1 of 2 - Newport Petroleum - 1998 Third Quarter Interim Report & Press Release TSE SYMBOL: NPP NOVEMBER 17, 1998 CALGARY, ALBERTA-- /T/ Three Months Ended Nine Months Ended September 30, September 30, 1998 1997 1998 1997 ------------------------------------------------------------- FINANCIAL ($ thousands except per share) Revenue from oil and gas sales 34,622 32,905 103,339 100,417 Cash flow from operations 15,031 15,995 44,948 51,268 Per share - basic 0.17 0.20 0.53 0.64 - fully diluted 0.17 0.20 0.52 0.62 Net earnings (loss) (314) 108 (893) 6,311 Per share - basic - - (0.01) 0.08 - fully diluted - - (0.01) 0.08 Average shares outstanding (000's) 88,203 79,761 84,193 79,709 Capital expenditures 37,985 26,360 97,365 104,710 ------------------------------------------------------------- OPERATING (Units as noted) Average sales Natural gas (mcf/d) 136,970 131,559 141,796 127,723 Crude oil (bbl/d) 4,837 3,843 4,172 4,008 Natural gas liquids (bbl/d) 1,768 1,813 1,851 1,812 Barrel of oil equivalent (boe/d) 20,298 18,810 20,202 18,593 Average sales price Natural gas ($/mcf) 1.98 1.84 2.00 1.87 Crude oil ($/bbl) 17.18 20.55 16.15 22.65 Natural gas liquids ($/bbl) 12.33 22.17 15.00 22.44 Barrel of oil equivalent ($/boe) 18.47 19.00 18.74 19.78 /T/ REPORT TO SHAREHOLDERS Newport's production volumes continued to grow during the first nine months of 1998. On a barrel of oil equivalent (boe) basis, using a 10:1 conversion for natural gas, the Company's average production for the first nine months of 1998 increased by 9 percent to 20,202 boe per day, compared to 18,593 boe per day during the first nine months of 1997. Natural gas prices increased by 7 percent to average $2.00 per mcf compared to $1.87 per mcf last year while oil and natural gas liquids prices decreased by 30 percent to $15.80 per barrel from $22.58 per barrel in 1997. On a boe basis, commodity prices declined by 5 percent resulting in cash flow of $44.9 million in 1998 compared to $51.3 million for the same period in 1997. Newport recently announced that it is acquiring a 7.9 percent working interest in the Caroline Swan Hills Gas Unit No. 1 for a purchase price of $165 million. A purchase and sale agreement has been signed subject to standard terms and conditions. The transaction is expected to close by January 15, 1999. The acquisition may be subject to right of first refusal provisions which, if exercised, could reduce Newport's interest in the property. The effective date of the purchase will be January 1, 1999. This transaction gives Newport an interest in the Caroline Swan Hills "A" Pool, one of the largest sour gas pools in Western Canada and includes a corresponding interest in the Shell-operated Caroline Gas Plant. Current net production from the property is over 5,000 boe per day, operating expenses are about $2.00 per boe and, despite the current low oil prices, netbacks exceed $12.00 per boe. This strategic acquisition provides Newport with a working interest in a gas plant located adjacent to Newport's Caroline Beaverhill Lake "B" Pool which was discovered in late 1997. OPERATIONAL REVIEW During the first nine months of 1998, Newport participated in the drilling of 65 wells with an average working interest of 69 percent. Of these 65 wells, 32 (21.5 net) wells were cased as potential gas wells and 19 (13.8 net) wells were cased as potential oil wells for an overall success rate of 78 percent. In addition to the Company's own drilling program, 14 wells were drilled pursuant to farm out arrangements with industry partners, resulting in 8 potential gas wells and 3 potential oil wells. Newport's capital expenditures were $97.4 million in the first nine months of 1998 which included $48.5 million for drilling and completions, $11 million for equipment and facilities, $24.3 million for land and seismic and $13.6 million for property acquisitions, net of dispositions. Natural gas production volumes averaged 141.8 mmcf per day for the nine months, an 11 percent increase over the 1997 volumes while oil and natural gas liquids production was 6,023 barrels per day, a 3 percent increase from the 1997 levels. Northern Area During the third quarter of 1998, Newport acquired its partner's 50 percent interest in the Rigel area of northeast British Columbia for $10.2 million and now has a 100 percent working interest in a significant new light oil discovery. To the end of the third quarter, 8 wells were drilled in the area and 5 additional wells have been drilled to date in the fourth quarter. The Company currently has two drilling rigs operating on these lands and plans to drill 6 additional wells prior to year end. The primary target is the Halfway formation at a depth of about 1,400 metres with wells that produce 40 degree API oil at initial rates of over 200 barrels per day. Additional exploration activity is also being conducted on Newport's undeveloped lands in this area. In the Cutbank area of northwest Alberta, a 200 square kilometer, 3D seismic program has been shot on lands operated by Chevron Canada. A 16 percent working interest well at 14-21-62-06 W6M is currently drilling with a planned total depth of over 4,500 metres. It is anticipated that this well will reach total depth prior to the end of 1998. A new 100 mmcf per day sweet gas plant to process deep, high pressure gas is being constructed with an anticipated start-up date in early 1999. To the west, a 100 square kilometer 3D seismic program has been completed over lands in which Newport has a 40 percent working interest. Following interpretation of this program, it is expected that a 4,900 metre well will be spudded prior to the end of 1998. To the east, Newport is continuing to evaluate its 100 percent working interest lands where a recent well has been drilled by another operator directly offsetting a proposed Newport location. Additional seismic is being planned to confirm a location for the first half of 1999. Newport has interests in 125,000 gross acres of undeveloped land in this area. The targets are high deliverability, sweet gas reservoirs with potential for 50 bcf per well. Newport has agreed to sell its interest in the existing outside operated Cutbank Gas Plant to a mid-stream processing company for $12 million. Newport will be afforded a preferential processing fee on its working interest gas being produced through this plant. Central Area A light oil discovery in the Shiningbank (Rosevear) area of west central Alberta has been followed up with the drilling of 4 additional wells. The initial well flowed 40 degree API oil at rates in excess of 500 barrels per day and subsequent wells have similar productivity. As a result of the drilling to date, Newport estimates that initial primary recovery from the pool could exceed 5 million barrels of oil. A study to determine the optimum depletion strategy is underway and it is anticipated that the recoverable reserves could be doubled through enhanced recovery using either a waterflood or a gas injection scheme. In addition to the oil zone, an underlying gas formation is also being evaluated. Two drilling rigs are operating in the area and it is anticipated that 5 additional wells will be drilled prior to the end of 1998. In the Gilby/Open Creek area of west central Alberta, Newport is participating in the construction of a 25 mile pipeline to tie in slightly sour gas to the Gulf-operated Rimbey Gas Plant. An application for the construction of the pipeline has been filed with the Alberta Energy Utilities Board (AEUB) and a decision is expected by mid November. This project is expected to add 6 to 7 mmcf/d of new gas production in late 1998 or early 1999. At Caroline in west central Alberta, Newport participated in the drilling of two wells to date in 1998. As a result, the Company now has an interest in 5 wells (3 drilled and 2 acquired) on this discovery. Integration of the drilling results and a 3D seismic program over the entire play confirms that this is a major gas discovery. Newport's independent engineering firm has completed a preliminary analysis of the northern portion of the pool and recognizes over 500 gross bcf of gas in place. Significant additional potential exists to the south and the Company plans to drill a well in 1999 to evaluate the southern extension. Newport has submitted a detailed development plan to the AEUB for the development of the Caroline Beaverhill Lake "B" Pool and has begun a consultative process with the Sundre Petroleum Operators Group and area residents. The second phase of the development plan anticipates the drilling of 4 additional wells and the tie in and testing of one existing well to the Shell Caroline Gas Plant. As the gas has a high concentration of hydrogen sulphide (H2S), flaring of the wells may not be permitted. An extended inline test to a plant will confirm the H2S and natural gas liquid content of the gas. Once this phase has been completed, negotiations concerning processing of the gas can be completed. As a new owner in the Caroline Gas Plant, Newport will have input concerning the possibility of processing 'B' Pool gas in this facility. Newport has recently completed a farm in arrangement from a major company with land offsetting the existing wells and has committed to drill a 100 percent working interest well to earn an interest in these lands. In addition, the Company has tied up, under a seismic review option, more than 90 sections of undeveloped land in the Caroline area. A detailed review of these lands is expected to lead to a number of new plays in the area. Newport's interest in the Caroline "B" Pool discovery, its interest in the Caroline Swan Hills "A" Pool and the Caroline Gas Plant, combined with a large amount of prospective undeveloped land, makes this a major core area for the Company. The dispute with Canadian 88 over operatorship of the Caroline "B" Pool is before the courts. Newport maintains its claim to operatorship and its position that Canadian 88's claims are without merit. Newport continues to vigorously defend this action and make every reasonable effort to resolve the dispute and pursue the common goal of developing and bringing this property on production as soon as possible. Southern Area In southern Alberta, the Company continues to be active in the Lathom, Enchant and Countess areas. The acquisition of the assets in the Majorville area closed as planned in September. Newport divested of its interests in southeastern Saskatchewan for proceeds of $1.8 million in the third quarter. With improved heavy oil differentials, the Company has commenced a three well, horizontal drilling program in the Hoosier area of southwest Saskatchewan. Results from these wells and the outlook for oil prices will determine if further drilling will be undertaken in the first part of 1999.

To: Kerm Yerman who wrote (13573)	11/17/1998 9:19:00 PM
From: Herb Duncan	Respond to of 15196

EARNINGS / Part 2 of 2 - Newport Petroleum - 1998 Third Quarter Interim Report & Press Release TSE SYMBOL: NPP NOVEMBER 17, 1998 CALGARY, ALBERTA-- FINANCIAL REVIEW Natural gas sales averaged 137 million cubic feet per day during the third quarter of 1998. This is a 4 percent increase from the 131.6 mmcf per day averaged in the comparable quarter in 1997. Natural gas liquids sales were 1,768 barrels per day during the third quarter of 1998 as compared to 1,813 barrels per day for the same quarter in 1997. Oil sales increased to 4,837 barrels per day in the third quarter, a 26 percent increase over the sales reported for the same quarter in 1997. The Company's sales averaged 20,298 boe per day in the third quarter of 1998 as compared to 19,858 boe per day in the second quarter of 1998. This represents a 2 percent increase over the previous quarter and a 9 percent increase over the third quarter in 1997. Average sales prices were $18.47 per boe in the third quarter, a 3 percent decrease from the comparative quarter in 1997 when sales prices averaged $19.00 per boe. For the nine months ended September 30, 1998, the Company's average sales price was $18.74 per boe as compared to $19.78 per boe in 1997. The Company averaged a netback of $10.55 per boe for its sales during the nine months ended September 30, 1998. The netback for the first nine months of 1997 was $11.74 per boe. Operating expenses were $4.19 per boe for the nine months ended September 30, 1998 as compared to $4.09 per boe for the year ended December 31, 1997. General and administrative expenses were $0.92 per boe in the third quarter of 1998 and averaged $1.11 per boe for the first nine months of 1998. The Company incurred a net loss of $0.3 million for the third quarter of 1998 as compared to a $0.6 million loss for the second quarter of 1998. Cash flow from operations for the third quarter increased by 4 percent from the second quarter of 1998. The third quarter cash flow from operations was $15.0 million or $0.17 per share. Cash flow from operations was $44.9 million ($0.53 per share) for the nine months ended September 30, 1998. During the nine months ended September 30, the Company expended $113.7 million on capital additions and received $16.4 million on the disposition of capital assets. Third quarter capital additions were $53.3 million and dispositions totalled $15.3 million. The Company ended the third quarter with working capital of $6.8 million and long term debt of $116.5 million. Annualized third quarter cash flow from operations was $60.1 million. Debt to cash flow at September 30, 1998 was 1.8 to 1. OUTLOOK Despite the continued progress in implementing pledged production cutbacks by OPEC and certain non-OPEC producers, sluggish demand growth due to a slowdown in world economic activity is delaying the restoration of balance in world oil markets. As a result, we expect crude prices will remain below US$16 per barrel for the remainder of the year. Low oil prices and high debt levels are continuing to constrain industry activity in Western Canada although some new equity has been raised in conjunction with recent property and corporate acquisitions. The expansion of TransCanada's pipeline system added about 400 mmcf per day of new pipeline capacity in early November and the completion of the 700 mmcf per day Northern Border Pipeline expansion to the Chicago market area is expected to be operational by mid December. With field receipts in Alberta lagging anticipated levels, spot and term prices have firmed and are providing producers with the opportunity to fix future prices at historically high levels. To date, Newport has fixed the price on 37 mmcf per day of its 1999 gas sales at about $2.55 per mcf. In the second quarter report, the Company indicated that it was well positioned to take advantage of opportunities that we anticipated would become available. The acquisition of the interest in the Caroline Swan Hills Gas Unit No.1 was such an opportunity. This strategic transaction will make Newport a significant owner in the Caroline Gas Plant. The development of Newport's Caroline "B" Pool discovery will lead to significant growth in the Caroline area for years to come. As a result of the Company's strong balance sheet, Newport will be able to finance the acquisition with increased bank lines and without the issuance of new equity. Our patience and discipline allowed us to take advantage of this unique opportunity to acquire an interest in one of the premier gas pools and gas plants in Alberta. The Board of Directors recently approved a 1999 capital budget totalling $285 million including the $165 million Caroline purchase. The 1999 exploration and development program is essentially unchanged from our plans prior to the announcement of the acquisition. Development drilling on our recent oil discoveries, combined with a number of tie in projects and the Caroline acquisition, will result in strong production and cash flow growth in early 1999. We are continuing with our strategy of combining high impact exploration with medium risk exploration and development and will continue to look for strategic acquisitions that complement our exploration activities. /T/ For and on behalf of the Board of Directors, Uldis Upitis Chairman and Chief Executive Officer Sid W. Dykstra President and Chief Operating Officer November 16, 1998 Consolidated Balance Sheets September 30 December 31 (Thousands of dollars) 1998 1997 1997 ------------------------------------------------------------- (unaudited) Assets Current assets Accounts receivable $ 39,354 $ 32,960 $ 37,737 Funds held in trust 3,526 - - ------------------------------------------------------------- 42,880 32,960 37,737 Property, plant and equipment 440,023 367,575 393,039 ------------------------------------------------------------- $482,903 $400,535 $430,776 ------------------------------------------------------------- ------------------------------------------------------------- Liabilities and Shareholders' Equity Current liabilities Accounts payable $ 36,109 $ 34,379 $ 39,101 Long-term debt 116,523 89,265 109,848 Provision for future site restoration costs 6,973 6,016 6,265 Deferred income taxes 29,148 26,411 29,046 Shareholders' equity Share capital 247,141 198,033 198,614 Retained earnings 47,009 46,431 47,902 ------------------------------------------------------------- 294,150 244,464 246,516 ------------------------------------------------------------- $482,903 $400,535 $430,776 ------------------------------------------------------------- ------------------------------------------------------------- Consolidated Statements of Operations and Retained Earnings Three Months Ended Nine Months Ended September 30, September 30, (Thousands of dollars) 1998 1997 1998 1997 ------------------------------------------------------------- (unaudited) (unaudited) Operating Revenue Petroleum and natural gas revenues $ 34,622 $ 32,905 $103,339 $100,417 Royalties 7,144 7,213 22,080 20,451 Production expenses 8,050 7,647 23,127 20,329 ------------------------------------------------------------- 19,428 18,045 58,132 59,637 ------------------------------------------------------------- Expenses General and administrative 1,723 756 6,111 4,940 Interest on long term debt 2,281 1,044 6,044 2,608 Depletion and depreciation 15,468 14,712 44,613 38,065 ------------------------------------------------------------- 19,472 16,512 56,768 45,613 ------------------------------------------------------------- Earnings (loss) before income taxes (44) 1,533 1,364 14,024 Income taxes Capital 393 250 1,029 820 Deferred (123) 1,175 1,228 6,893 ------------------------------------------------------------- 270 1,425 2,257 7,713 ------------------------------------------------------------- Net earnings (loss) for the period (314) 108 (893) 6,311 Retained earnings, beginning of period 47,323 46,323 47,902 40,120 ------------------------------------------------------------- Retained earnings, end of period $ 47,009 $ 46,431 $ 47,009 $ 46,431 ------------------------------------------------------------- ------------------------------------------------------------- Net earnings (loss) per share: Basic $ 0.00 $ 0.00 $ (0.01) $ 0.08 Fully diluted $ 0.00 $ 0.00 $ (0.01) $ 0.08 ------------------------------------------------------------- ------------------------------------------------------------- Consolidated Statements of Changes in Financial Position Three Months Ended Nine Months Ended September 30, September 30, (Thousands of dollars) 1998 1997 1998 1997 ------------------------------------------------------------- (unaudited) (unaudited) Cash provided by (used in) Operations Net earnings (loss) $ (314) $ 108 $ (893) $ 6,311 Items not affecting cash Depletion and depreciation 15,468 14,712 44,613 38,065 Deferred income tax (123) 1,175 1,228 6,893 ------------------------------------------------------------- 15,031 15,995 44,948 51,269 Changes in non-cash working capital (86) (6,584) (2,832) (10,748) ------------------------------------------------------------- 14,945 9,411 42,116 40,521 ------------------------------------------------------------- Financing Common shares, net of issue costs (890) 272 53,877 11,756 Increase in long term debt 34,758 33,837 6,675 43,094 ------------------------------------------------------------- 33,868 34,109 60,552 54,850 ------------------------------------------------------------- Investments Additions to property, plant and equipment (53,255) (31,425) (113,735) (114,517) Proceeds on sale of property, plant and equipment 15,270 5,065 16,370 9,807 Changes in non-cash working capital (10,828) (17,160) (5,303) 3,561 ------------------------------------------------------------- (48,813) (43,520) (102,668) (101,149) ------------------------------------------------------------- Increase (decrease) in cash position during the period - - - (5,778) Cash position, beginning of period - - - 5,778 ------------------------------------------------------------- Cash position, end of period $ - $ - $ - $ - ------------------------------------------------------------- ------------------------------------------------------------- Cash flow per share Basic $ 0.17 $ 0.20 $ 0.53 $ 0.64 Fully diluted $ 0.17 $ 0.20 $ 0.52 $ 0.62 ------------------------------------------------------------- ------------------------------------------------------------- HEAD OFFICE Suite 3300, Bow Valley Square II 205 - 5th Avenue S.W. Calgary, Alberta T2P 2V7 Telephone: (403) 531-1530 Facsimile: (403) 531-1539 e-mail: exec@newportpet.com Website: www.newportpet.com DIRECTORS Gerald M. Deyell (2)(3)(4) Partner Blake, Cassels & Graydon Calgary, Alberta Sid W. Dykstra (4) President & Chief Operating Officer Newport Petroleum Corporation Calgary, Alberta Iain J. Harris (1)(2)(3) Chairman & Chief Executive Officer Summit Holdings Ltd. Vancouver, British Columbia Carl-Martin Nagel (1)(3) Businessman Bad Vilbel, Germany Uldis Upitis (1)(2) Chairman & Chief Executive Officer Newport Petroleum Corporation Calgary, Alberta (1) Audit Committee (2) Governance Committee (3) Compensation Committee (4) Environmental/Safety Committee OFFICERS Uldis Upitis Chairman & Chief Executive Officer Sid W. Dykstra President & Chief Operating Officer Maurice L. Randall Vice President, Marketing & Corporate Development George Ongyerth Vice President, Exploration Nola C. Hall Vice President, Administration & Corporate Secretary R. Kenneth Pretty Vice President, Land Byron C. Lutes Vice President, Engineering Michael Tkaczuk Treasurer & Controller LEGAL COUNSEL Blake, Cassels & Graydon Calgary, Alberta BANKERS The Toronto Dominion Bank Canadian Imperial Bank of Commerce Calgary, Alberta AUDITORS KPMG Chartered Accountants Calgary, Alberta Registrar and TRANSFER AGENT The Montreal Trust Company of Canada 6th Floor, 530- 8th Avenue S.W. Calgary, Alberta T2P 3S8 EXCHANGE LISTING The Toronto Stock Exchange Trading Symbol: NPP /T/

To: Kerm Yerman who wrote (13573)	11/17/1998 9:21:00 PM
From: Herb Duncan	Respond to of 15196

EARNINGS / PEBERCAN: Third Quarter Report ME SYMBOL: PBC NOVEMBER 17, 1998 MONTREAL, QUEBEC--The highlight of the third quarter of 1998 was the leasing of the PEBERCAN drilling rig to PREMIER OIL, a British petroleum company, for use in drilling the Violeta well in Cuba. Drilling took place between June 20 and August 26, 1998, and PEBERCAN is happy to have proven the reliability of its technical team and its drilling rig at this well. The operator's main objective was attained without any technical incident. The company posted revenues of $1,713,184 in the third quarter (compared to $0 in 1997) thanks to the leasing of the drilling rig. The company is continuing its policy of reducing administrative costs. These costs were slashed from $440,172 in 1997, to $224,434 in 1998. Last year, the cost incurred in rebuilding the drilling rig was posted as an expense. This amount includes expenses related to the active search for partners in the drilling of Canasi 1 that PEBERCAN intends to start as soon as possible. Consolidated results show a net income of $24,374 ($0 per share) in the third quarter compared to a loss of $811,649 ($0.02 per share) for the same period last year. This net income is basically due to the leasing of the drilling rig. The decline in liquidity recorded over the last three months stands at $1,070,477 ($4,892,351 in 1997). This amount is mainly due to investments in petroleum assets ($832,363) and to the acquisition of capital items for the drilling rig ($856,827). On September 30, 1998, the balance of liquidities was $856,827, compared to $259,516 in 1997. PEBERCAN will henceforth concentrate on seeking other partners to start drilling Canasi 1 on Block 7. The company has decided to extend its partnership proposals to the other concessions of its mining area in Cuba. The Board of Directors and the Management of PEBERCAN would like to thank shareholders for their continued confidence in this project in this era of turbulent financial markets.

To: Kerm Yerman who wrote (13573)	11/17/1998 9:22:00 PM
From: Herb Duncan	Respond to of 15196

EARNINGS / Highridge Increases Production & Cash Flow TSE SYMBOL: HRE NOVEMBER 17, 1998 CALGARY, ALBERTA--HIGHRIDGE EXPLORATION LTD. ("HRE" - TSE) is please to announce that production in the third quarter increased 55 percent, compared to the third quarter of 1997, to average 15.3 MMcf/d and 1,170 Bbl/d (2,700 BOE/d). This dramatic production growth for the third quarter resulted in cash flows improving by 16 percent over last year despite low oil and NGL prices. Highridge is well positioned to show continuing growth in production and cash flow in the fourth quarter as more gas wells come on production and gas prices improve. Highridge participated in the drilling of 21 (11.6 net) wells and farmed-out two additional wells during the first nine months of 1998. The results were 4 (2.8 net) oil wells and 14 (7.3 net) gas wells for a success rate of 87 percent. Oil production averaged 732 barrels per day and NGL production averaged 438 barrels per day during the quarter, an increase of 51 percent from 727 barrels per day in the same period in 1997. Gas sales were 15.3 million cubic feet per day, an increase of 59 percent compared to 9.6 million cubic feet per day last year. The anticipated plant expansion at McLeod has been further delayed awaiting regulatory approvals. In order to minimize the impact of this delay, Highridge has installed an additional eight MMcf/d of compression bringing the total to 16 MMcf/d which is utilized to transport some of our gas to a plant to the west of McLeod and additional capacity at a nearby facility to the east is also being utilized. The battery and waterflood at Redwater/Norris are now fully functional resulting in operations that are more efficient with lower operating costs. The horizontal well at Redwater continues to produce above expectations. Recent optimization of the horizontal well has brought the production up to 300 barrels per day net to Highridge from an initial rate of 250 barrels per day in June. The drilling of the five adjacent horizontal wells remain on hold pending improvement in oil prices. Further details of the third quarter and nine months results are provided below: /T/ Three Months Change Nine Months Change 1998 1997 Percent 1998 1997 Percent Natural Gas Production (Mcf/d) 15,300 9,634 59 14,387 9,998 44 Oil & NGL Production (Bbl/d) 1,170 777 51 1,176 818 44 Total (BOE/d) 2,700 1,740 55 2,614 1,818 44 Gas Price ($/Mcf) 1.85 1.65 12 1.90 1.84 3 Oil Price ($/Bbl) 16.33 23.20 (27) 17.19 23.92 (28) NGL Price ($/Bbl) 10.17 21.92 (54) 13.87 22.82 (39) Net Revenue ($000) 3,736 2,711 39 11,052 9,014 23 Cash Flow ($000) 1,932 1,662 16 5,310 5,490 (3) Per Share ($/share) 0.15 0.14 7 0.42 0.44 (4) Net Earnings ($000) 84 661 (87) 147 1,914 (92) Per Share ($/share) 0.00 0.05 - 0.01 0.15 (93) /T/ Highridge is a public oil and gas company active in Central Alberta, Canada. The common shares of Highridge are listed on The Toronto Stock Exchange and trade under the symbol "HRE".

To: Kerm Yerman who wrote (13573)	11/17/1998 9:24:00 PM
From: Herb Duncan	Respond to of 15196

EARNINGS / Ionic Energy Inc. Announces Nine Month Results Ending September 30, 1998 ASE SYMBOL: IOI NOVEMBER 17, 1998 CALGARY, ALBERTA-- /T/ Three Months Nine Months Five Months ended ended ended Sept 30, Sept 30, December 31, 1998 1998 1997 ------------------------------------------------------------- HIGHLIGHTS FINANCIAL ($s except shares) Oil and gas revenues before royalties 2,064,589 4,867,640 1,712,852 Cash flow from operations 1,026,170 2,276,281 764,288 Per share - basic 0.07 0.15 0.08 Net earnings 237,338 529,327 175,702 Per share - basic 0.01 0.03 0.02 Capital expenditures 4,105,109 14,179,798 11,621,773 Long term debt 3,477,382 3,477,382 Nil Total assets 27,354,642 27,354,642 14,760,135 Weighted average number of shares outstanding 15,283,538 15,283,538 9,482,548 OPERATING Natural gas production Total (mcf) 875,935 1,983,999 657,532 Daily (mcf/d) 9,521 7,267 4,298 Price ($/mcf) 1.80 1.77 (x) 1.74 Crude oil and natural gas liquids production Total (bbls) 20,628 58,477 20,684 Daily (bbls/d) 224 214 135 Price ($/bbl) 15.52 16.24 21.90 Barrels equivalent daily production (boe/d-10:1) 1,176 941 565 (x) restated to exclude processing revenue /T/ Ionic Energy Inc. - ASE ("IOI") announces the financial and operating results for the nine months ended September 30, 1998. For the nine months ending September 30, 1998, Ionic recorded gross revenues of $4,867,640. In comparison, for the five months of commercial operations ending December 31, 1997, Ionic's total gross revenues were $1,712,852. Cash flow from operations for the nine months ended September 30, 1998 was $0.15 per share (1997: $0.08), being $2,276,281 (1997: $764,288). Cash flow during the third quarter of 1998 was $1,026,171 or $0.07 per share, representing a forty-six per cent growth compared to the second quarter. Net earnings to the end of September 1998 were $529,327 (1997: $175,702), or $0.03 per share (1997: $0.02). Ionic is heavily gas weighted, with natural gas contributing year to date seventy-seven percent of average daily production. Production of crude oil, NGL's and natural gas averaged 1,176 boe/d during the third quarter, up from 991 boe/d for the second quarter and 649 boe/d during the first quarter of 1998. The average sales price received for crude oil and natural gas liquids has averaged $16.24 per bbl during 1998, compared to $21.90 in 1997. Natural gas prices have averaged $1.77 per mcf in 1998 compared to the average $1.74 per mcf received in 1997. Operating costs were stable, with average costs of $4.20 per boe this quarter compared to $4.24 per boe in the prior quarter. General and administrative costs have decreased on a per boe basis from $2.39 in the first quarter to $1.33 in the third quarter of 1998, reflecting increased production volumes. Interest expense was incurred as the Company began utilizing their line of credit facilities. During the first nine months of 1998, Ionic participated in the drilling of 18 gross wells (11.3 net) with an overall success rate of 72 per cent. It is anticipated a further six wells will be drilled prior to year end and upward of eight to ten wells in the first quarter of 1999 as part of our winter exploration program. Capital expenditures this year have totalled $14,179,798. During the third quarter Ionic closed on previously announced acquisitions in the Carvel/Cardiff area. Through a combination of drilling, workovers and facility enhancements, Ionic has increased net production in this area from 2.0 mmcf/d to 5.0 mmcf/d. Ionic now operates two facilities and has 24 undeveloped sections of land within this active exploration fairway. The Company has six drillable locations in the area and will be enhancing upward of nineteen leads for future development. On November 5,1998, the Company entered into an agreement to sell up to $3.0 million in flow through shares at $1.85 per share. Closing is scheduled for November 18, 1998. Proceeds of the issue will be used to accelerate its 1999 exploration program through an enhanced seismic program and an active winter exploratory drilling program. The capital program for 1999 is anticipated to cost $18 million and includes 30 gross (20 net) wells. Ionic remains a natural gas leveraged exploration and production company, with a growing drilling and opportunity inventory, focused in West Central Alberta. The Company is strategically positioned to capitalized on these opportunities in 1999.