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

To: Kerm Yerman who wrote (13723)	11/26/1998 1:58:00 AM
From: Kerm Yerman	Respond to of 15196

SERVICE SECTOR / Destiny Resource Services Third Quarter Report DESTINY ANNOUNCES ACQUISITION OF OILFIELD SERVICE COMPANIES CALGARY, AB-- DESTINY RESOURCE SERVICES CORP. ("Destiny") (TSE/ASE : DSC) today announced that it has acquired all of the issued and outstanding shares of Sharp Environmental Ltd. and Triple B Reclamation Ltd., both privately held companies based out of Fairview, Alberta. The total purchase price is $2.65 million comprised of the following: $1,333,000 in cash, 376,452 Common Shares of Destiny at $3.10 and the assumption of debt. Additional amounts may become payable in each of the next five fiscal years based on the financial performance of Sharp Environmental and Triple B Reclamation. Destiny will also receive an exclusive license agreement for the production and sale of the patented frozen topsoil cutter, developed by the principals of Triple B. Adrian Erickson, President and C.E.O. of Destiny stated: "Environmental concerns are increasing and regulatory constraints are getting tougher. As a result, reclamation, a business we have been involved in for the last 25 years offers Destiny growth opportunities. The acquisition of Sharp and Triple B is consistent with our strategy of becoming a dominant service provider in strategic geographic regions. Both of these companies are major Canadian players which have offices in Fairview in northwestern Alberta and at Fort St. John in northeastern British Columbia." He added: "We plan to continue their expansion based on their reputation for consistent, top quality results. Destiny will also capitalize on the fact that the heavy equipment hired by Sharp and Triple B's reclamation business during the summer months, is the same as that used by Destiny for line clearing in the winter months. Sharp and Triple B fit perfectly with our strategy of getting increased utilization out of our equipment. The acquisition will also enhance our management expertise in this growing area". Revenue of Sharp Environmental and Triple B Reclamation for the past 6 months ended October 31, 1998, is approximately $2.0 million (unaudited) with normalized net income of approximately $225,000 (unaudited). During that time the two companies contracted out an additional $2.5 million in third party heavy equipment services, a majority of which the consolidated Destiny Group will now provide, resulting in a significant increase in the utilization of our equipment. The effective date of the transactions is June 1st, 1998. Commenting on Destiny's recent acquisitions Mr. Erickson said: "Over the past six months we have made 6 strategic acquisitions which should add approximately $45 million in revenues to our fiscal 99 results. These acquisitions were made in order to strengthen our position as a premier oil and gas service company in strategic geographic regions and to position Destiny as a dominant player in specifically targeted sectors of the oil and gas exploration industry. All of these acquisitions will provide Destiny with the ability to utilize common resources, thereby lowering capital expenditures and administrative costs and increasing equipment utilization". He concluded: "Over the upcoming months we will focus our energies on integrating these recent acquisitions into our organization, extracting efficiencies out of these operations and maximizing the utilization of our equipment and manpower with a view to smoothing out the seasonal cyclicality inherent in the oil and gas industry". Destiny Resource Services Corp. is a Calgary based service company providing integrated services to the oil and gas industry in Canada, the United States, Central and South America, the Middle East, Africa and Southeast Asia. Neither The Toronto Stock Exchange nor the Alberta Stock Exchange has approved nor disapproved of the information contained herein.

To: Kerm Yerman who wrote (13723)	11/26/1998 2:01:00 AM
From: Kerm Yerman	Respond to of 15196

PROPERTY ACQUISITION / Genesis Exploration Ltd. Completes Acquisition CALGARY, Nov. 25 /CNW/ - Genesis Exploration Ltd. today closed the previously announced agreement to acquire an average 93% working interest in an oil producing property and approximately 21% interest in a 20 mmcf/d gas processing plant in the Sturgeon Lake area of northwestern Alberta. The purchase price subject to post closing adjustments was $31 million.

To: Kerm Yerman who wrote (13723)	11/26/1998 2:02:00 AM
From: Kerm Yerman	Respond to of 15196

ACQUISITIONS - MERGERS / Braegan Energy Mails Bid for Greyhawk Oil & Gas CALGARY, Nov. 25 /CNW/ - Braegan Energy Ltd. (''Braegan'') announced today that it has mailed, to all registered holders of shares of Greyhawk Oil & Gas Inc. (''Greyhawk''), a Takeover Bid Circular containing the details of its previously announced offer to acquire all of the shares of Greyhawk. The offer provides that Greyhawk shareholders will receive, for each common share tendered, 0.27548 of a Braegan common share. The offer will expire at 3:00 p.m. (Calgary time) on December 17, 1998, unless extended. The offer is subject to all necessary regulatory approvals and to customary conditions including not less than 75% of the outstanding Greyhawk shares being tendered under and not withdrawn from the offer. Greyhawk also mailed today a Directors' Circular, to all registered holders of shares of Greyhawk, unanimously recommending that the shareholders accept the offer and tender their shares. The Alberta Stock Exchange has neither approved nor disapproved the information contained herein.

To: Kerm Yerman who wrote (13723)	11/26/1998 2:04:00 AM
From: Kerm Yerman	Respond to of 15196

EARNINGS / Lateral Vector Resources Inc. Announces Third Quarter 1998 Results REGINA, Nov. 25 /CNW/ - Lateral Vector Resources Inc. (''LVR'') today released its financial results for the nine month period ended September 30, 1998. The Company's activities during the third quarter of 1998 continued to be focused on its two international projects, in China and the Ukraine. The company also implemented a number of organizational changes which are intended to reduce overhead costs. These initiatives included the move of accounting and administration activities for the China project from Calgary to Regina. Substantial operational cost reductions were also made in China. In light of the reduced level of current activities in China and Ukraine, the Company has reduced overhead costs by up to 50%. These structural changes are predominantly in response to softened commodity markets and current uncertainty of international capital markets. The company has concluded that it will only proceed with its international projects when strategic partners are firmly in place with sufficient capital to execute a substantial work program to capitalize on identified reserves. In the Ukraine, significant progress has been made toward securing project financing. Two major operational milestones were achieved. A 20 year production license was issued by the State Geology Committee of Ukraine in support of the Company's JIPA agreement with Ukranafta and IPEC, for redevelopment of the Bugruvatiske oil field. As well, the Company and its advisors completed a review of information provided by LVR's project partner, the joint Stock Company, Ukrnafta, which supports original estimates of oil in place calculated by the Ukrainian Oil and Gas Institute from the fields covered by LVR's license. The JIPA as well as the reserves for the Bugruvatiske field support LVR's TSE listing requirements of a minimum of $2 million of proved producing reserves. With respect to the China project, the process of securing a strategic financing partner has been hindered by the economic crisis in Asia and exacerbated by the state of world oil prices. Due to continued delays in securing a strategic partner, LVR has suspended all operations in China except those which facilitate renegotiations of contract terms to reflect current economic circumstances and continued pursuit of partners. Accordingly LVR has written down the China investment by $23.4 million for financial statement purposes to comply with Canadian GAAP. This write down resulted in a loss for the nine month period ended September 30, 1998 of $23.4 million. LVR remains of the view that the experience which the Company has gained in its Chinese operations and the relationship it has established with Chinese counterparts represent significant value which it will endeavor to capitalize upon through the negotiation of new agreements which reflect current economic realities. Re-commencement of operations based upon such new agreements will be subject to securing a strategic financing partner. LVR confirms it continues ongoing discussions with a number of potential partners for the project. Lateral Vector Resources Inc. is a Canadian resource company with head office in Saskatchewan. The Company specializes in international oil projects and is listed on the Toronto Stock Exchange under the symbol LVR. The TSE has neither approved nor disapproved of the information contained herein.

To: Kerm Yerman who wrote (13723)	11/26/1998 2:08:00 AM
From: Kerm Yerman	Read Replies (17) \| Respond to of 15196

EARNINGS / Merit Energy Ltd. Drilling Success and Production Increases Highlight Strong Growth in Third Quarter CALGARY, Nov. 25 /CNW/ - Merits - Merit embarked on an ambitious drilling program in the third quarter and was rewarded with an exceptional 93 percent success rate. The drilling program consisted of 58 wells of which 54 were cased as gas wells while four were abandoned. With the success of this program Merit is poised to capitalize on strong gas prices throughout the fourth quarter when production from these wells will come onstream. Merit's current sales rate is approximately 9200 barrels of oil equivalent per day with a production profile of 80 percent natural gas and 20 percent crude oil and natural gas liquids. - Merit closed a strategic acquisition in the Superba area of East Central Alberta during the third quarter. The acquisition provided the company with existing production, a strong facility position, additional infrastructure and roughly 20 sections of undeveloped land for future exploration. As a result of the additional production and infrastructure enhancements net production in the area was immediately increased by greater than one million cubic feet per day. - During the quarter Merit announced the promotion of Ilene Schmaltz to Vice President, Marketing. Ilene has over 20 years of oil and gas marketing experience and is a valuable addition to the senior management of the Company. Subsequent Events - In early November Merit issued two million flow-through common shares at a price of $5.00 per share providing total proceeds of $10 million. The flow-through shares were issued primarily to institutional investors and proceeds will be spent on exploration drilling and seismic in 1998 and 1999. - In October Merit entered into a major Farmin in our East Central Core Area. The Farmin provides exploration opportunities on an additional 120,000 undeveloped acres within a 53 township area. - Drilling in early October continued its successful trend with the completion of a discovery well in Southern Alberta. Merit holds a 100 percent working interest in the well which is a multi-zone producer and is capable of producing greater than six million cubic feet per day. - Currently 80 percent of Merit's natural gas production is tied to Alberta pricing. With no downstream pipeline transportation commitments, Merit is in a position to take advantage of very strong Alberta based pricing. To date Merit has locked-in 30 percent of its exposure to Alberta pricing for winter with a minimum price of $2.80 per thousand cubic feet and 25 percent for summer with a minimum price of $2.40 per thousand cubic feet. Production - Merit exited the third quarter at a rate of 7,500 barrels of oil equivalent per day, consisting of 59.4 million cubic feet per day of natural gas production and 1,565 barrels of crude oil and natural gas liquids production. On a total production basis this represents an increase of 99 percent over the 1997 third quarter exit rate of 3,761 barrels of oil equivalent per day, which consisted of 28.1 million cubic feet per day of natural gas production and 951 barrels per day of crude oil and natural gas liquids production. - In the third quarter of 1998 sales averaged a rate of 7,003 barrels of oil equivalent per day. Third quarter average natural gas sales of 52.9 million cubic feet per day represented an increase of 177 percent from 19.1 million cubic feet per day in the third quarter of 1997. Crude oil and liquids sales for the third quarter were 1,713 barrels per day, up 136 percent from 725 barrels per day in the third quarter of 1997. - Merit achieved an average sales rate of 6,420 barrels of oil equivalent per day in the nine-month period representing an increase of 156 percent over average sales of 2,506 barrels of oil equivalent per day in 1997. Nine-month average natural gas sales of 48.0 million cubic feet per day represented an increase of 154 percent compared to the 18.9 million cubic feet per day averaged in the same period last year. On the crude oil and natural gas liquids side, Merit recorded average sales of 1,619 barrels per day in the nine month period, a 162 percent increase over 1997 production of 618 barrels per day. Financial - Revenue over the nine months ending September 30, 1998, increased 140% to $29 million compared to $12.1 million in the corresponding period in 1997. Funds from operations increased 68% to $11.4 million ($0.38 per share) from $6.8 million in the nine months of 1997($0.34 per share). - Merit returned to a positive net income position in the third quarter recording net income of $57,153. For the nine-month period net income totaled $31,063 ($0.00 per share) compared to $2,906,124 one year ago. Further gains in net income have been impacted by continued low oil prices that averaged $12.51 for the nine-month period. - Net capital expenditures amounted to $80.5 million in the nine months, compared to $55.6 million in the same reporting period of 1997. Forty-one million was spent on acquisitions and the balance on the drilling and exploitation programs. The capital program has been financed through cash flow, bank debt and equity. Exploration - Merit drilled 134 gross (126.9 net) wells in the first nine months of 1998 with an overall drilling success rate of 80 percent. In the third quarter Merit continued its strategy of focusing on gas opportunities and drilled 58 gross (55.7 net) wells resulting in 54 gas wells and 4 dry holes providing a success rate of 93 percent on a gross basis. - In Southwestern Saskatchewan Merit continued to develop its Rangeview gas play drilling 15 successful gas wells. A new gas plant was completed in the third quarter and early in the fourth quarter additional compression was installed at an existing plant. Production from this area is approaching 8 million cubic feet per day. - In Alberta Merit focused its exploration efforts on multi-zone wells targeting deeper formations within the Mannville where reserves are larger and production rates are higher than the upper cretaceous formations. This strategy has proved very successful particularly in the Acadia/Bindloss area. Third Quarter Financial Results ($ thousands, except per share information) Nine Months Ended Three Months Ended September 30 September 30 1998 1997 1998 1997 --------------------------------------- Oil and gas revenue 28,989 12,071 10,610 4,073 Sales price Natural gas ($/mcf) 1.79 1.64 1.74 1.53 Crude oil ($/bbl) 12.51 21.33 13.66 20.93 Funds from operations 11,398 6,832 3,524 2,292 Per common share 0.38 0.34 0.12 0.11 Net earnings 31.1 2,906 57.2 1,212 Per common share 0.00 0.15 0.00 0.06 Capital expenditures 80,493 55,579 20,463 8,470 Long term debt, net of working capital 75,635 17,039 75,635 17,039 Third Quarter Operating Results Nine Months Ended Three Months Ended September 30 September 30 1998 1997 1998 1997 --------------------------------------- Sales Volumes Natural gas (mcf/d) 48,013 18,877 52,895 19,053 Oil and liquids (bbls/d) 1,619 618 1,713 725 Total Boe/d 6,420 2,506 7,003 2,630 1998 Drilling Activity Nine Months Ended Three Months Ended September 30 September 30 Gross Net Gross Net --------------------------------------- Crude oil wells 8 7.7 0 0 Natural gas wells 98 95.4 54 53 Service wells 1 0.5 0 0 D&A wells 27 23.3 4 2.7 Total Wells 134 126.9 58 55.7 Exploratory Wells 75 20 Success rate 80% 93%

To: Kerm Yerman who wrote (13723)	11/26/1998 2:11:00 AM
From: Kerm Yerman	Respond to of 15196

PROPERTY DISPOSITION / Canada Southern Petroleum Sells Heavy-Oil Properties CALGARY, AB, Nov. 25 /CNW/ - Canada Southern Petroleum Ltd. (Nasdaq: CSPLF; Toronto/Boston/Pacific: CSW) said it has agreed to sell its heavy-oil properties in Alberta for $2.2 million, and that the sale will close today. The company also noted that it completed the previously announced sale of some of its British Columbia properties for approx. $3.6 million on Nov. 18. Canada Southern will record an estimated gain of $1.3 million on both transactions, a spokesman said.

To: Kerm Yerman who wrote (13723)	11/26/1998 2:13:00 AM
From: Kerm Yerman	Respond to of 15196

FIELD ACTIVITIES / Dynamic Oil & Gas updates reserves and production RICHMOND, BC, Nov. 25 /CNW/ - Dynamic Oil & Gas, Inc. NASDAQ: DYOLF; VSE: DOL Dynamic is pleased to report that it has received an amendment to its April 1, 1998 corporate evaluation. The report, prepared by Status Engineering Associates Ltd. of Calgary, AB, is updated to October 1, 1998 and considers new reserves added during the six month period, as well as actual and forecasted production rates and pricing. Proved and probable gas reserves rose 8% to 41.7 (Bcf) billion cubic feet in the first half of fiscal 1999, up from 38.6 Bcf recorded at the end of fiscal 1998. Proved natural gas liquids and crude oil rose 47% to 2.5 million barrels from 1.7 million barrels in 1998. Total proved and probable reserves increased from 5.5 million barrels of oil equivalent (BOE) in fiscal 1998 to 6.8 million BOE at the midpoint of fiscal 1999. Dynamic's reserve base is weighted heavily in favor of natural gas with gas and natural gas liquids comprising 98% of Dynamic's proved reserve base. Additions came primarily from on-going development of the Company's St. Albert, AB property. For the second quarter of fiscal 1999 ending September 1998, total corporate production volumes averaged 1,690 BOE per day compared to 182 BOE per day for second quarter 1998. Second quarter financial results will be released November 27, 1998. Starting December 15, 1998, natural gas production from the St. Albert property is expected to increase to approximately 35.0 million cubic feet per day (mmcf/d) from current levels of 20.0 mmcf/d as installation of new equipment is completed. Dynamic has a 50% working interest in the production and new facilities.

To: Kerm Yerman who wrote (13723)	11/26/1998 2:21:00 AM
From: Kerm Yerman	Read Replies (3) \| Respond to of 15196

ENERGY TRUSTS / Morrison Facilities Income Fund Third Quarter Report for the period ended September 30, 1998 CALGARY, Nov. 25 /CNW/ - To the Unitholders Financial and Operational Highlights Three Months ended Nine Months ended September 30 September 30 (Unaudited, $ thousands except per unit amounts) 1998 1997 1998 1997 ------------------------------------------------------------------------- Gross revenues $ 8,884 $ 8,396 $ 28,465 $ 31,831 Net gas processing profits 2,426 3,230 8,573 10,750 Net pipeline profits 1,392 923 3,887 4,040 Income before restructuring costs 891 1,622 4,515 7,432 Net income 891 1,622 (679) 7,432 Distributable cash flow 2,575 3,763 10,101 13,666 Per unit $ 0.13 $ 0.19 $ 0 .51 $ 0.69 ------------------------------------------------------------------------- Volumes Processing (mmcf/d) 94 108 100 110 Pipeline (bbls/d) 46,830 43,928 47,195 44,475 ------------------------------------------------------------------------- ------------------------------------------------------------------------- >> Morrison Facilities Income Fund Announces Capital Reinvestment Program Morrison Facilities Income Fund announces its third quarter results and declares a distribution of $0.13 per trust unit. The Fund owns two viable businesses: a gas processing business which features the Nevis gas facilities and a pipeline business comprising the northeast British Columbia oil pipeline system. In existence for over 30 years, these businesses provide strategic services in the areas they operate. The pipeline business is a very successful operation and contributes over one third of the Fund's operating profits. The revenue stream is based on a return on invested capital and is not affected by oil prices or throughput volumes. The northeast British Columbia area is one of the least explored areas of the Western Sedimentary Basin and, as a result, is experiencing substantial production growth. This should lead to additional capital investment by the Fund and higher revenues in the years ahead. The gas processing business, ironically, has been affected by the weak commodity price for crude oil. Approximately 68% of gas processing revenue comes from natural gas produced in association with the production of crude oil. As the price of crude oil drops, the economic returns to producers from this type of production also declines. In addition, for much of this year oil and gas companies have been unable to raise equity financing on acceptable terms. These factors have led to drilling activity in the facilities' 4,000 square mile service area to be less than expected and, correspondingly, have contributed to a decline in processing volumes through the plant. The gas processing business has experienced fluctuations in volumes throughout its long history. However, it has a successful track record of attracting additional volumes and cash flow through judicious investment in capital projects. Western Facilities Management Limited, the new manager of the Fund, has identified a number of capital projects which it believes will add to Nevis facilities' processing volumes and reserve base. It also believes that in order to maintain the financial health of the Fund it should not borrow for capital projects beyond certain prudent levels. Therefore, the Board of Directors has approved a capital reinvestment program commencing immediately and continuing over the coming year whereby up to 15% of potential distributable cash flow will be reinvested in capital projects designed to offset the declines in the Nevis service area. This step is being taken to solidify and strengthen one of the Fund's major business segments. The benefit to distributions from such capital spending takes time to be realized. Therefore, distributable cash flow will likely continue for the next few quarters at a level similar to that being reported for the third quarter of 1998. Over the longer term this initiative is expected to provide growth in processing volumes and a corresponding increase in distributions. Even after adjusting distributions to the new level pursuant to this plan, the Fund offers excellent value measured in terms of both net asset value per unit and on an after tax yield basis. The Fund has excess borrowing capacity which can be utilized if there are attractive new business opportunities which fit into its major business segments. One of the criteria for any new capital investment will be the ability of the project to repay any debt taken on to fund it over a reasonable period of time while adding to distributions for Unitholders. Operational Results Pipeline The pipeline business continues to report excellent results. Volumes for the nine months averaged 47,195 bbls/d versus 44,475 bbls/d in 1997, reflecting an increase in activity by producers in the service area. Net pipeline profits for the third quarter were $1.4 million compared to $0.9 million the previous year. For the nine months ended September 30, 1998, net pipeline profits were $3.9 million, which is comparable to the same period in 1997. Nevis Facilities Processing volumes averaged 100 mmcf/d for the nine months of 1998 versus 110 mmcf/d for the same period in 1997. This decline in volumes combined with a movement to a higher percentage of sweeter gas processed than sour, contributed to lower net processing profits of $8.6 million through the first nine months of 1998 versus $10.8 million a year earlier. Operations have been affected by natural reservoir decline, reduced drilling activity in the Nevis service area and an unexpected loss of a 5 mmcf/d well that was shut-in. Current processing volumes are now running at about 90 mmcf/d. As previously discussed, a number of capital projects have been identified which are expected to contribute to additional processing volumes through the facilities beginning in 1999. A major study is currently underway to evaluate the use of the facilities' excess compressor capacity to lower the inlet pressure to the plant of certain natural gas streams. This would have the effect of increasing volumes and ultimate reserves produced from the service area. As previously reported, two area producers made an application to the Alberta Energy and Utilities Board (EUB) in an attempt to reduce processing fees. The EUB hearing is scheduled for November 30, 1998. The processing fees are governed by existing contracts and management believes that the producers claims are without merit. The application is being vigorously opposed. Financial Results Distributable cash flow for the three months ended September 30, 1998 was $2,575,000 or $0.13 per trust unit, down from $0.19 per unit in 1997. The lower distribution is the result of $0.02 per unit reserved for capital reinvestment, a decline in net gas processing profits, higher interest expenses and certain non-recurring charges incurred in the third quarter. The distribution will be made on December 31, 1998 to unitholders of record on December 15, 1998. It will be tax deferred to unitholders. New Management Arrangements The management arrangement with Western Facilities Management Limited entered into in June 1998 aligns the interests of the manager with those of the unitholders. The management fee is calculated at 4% of operating income after the deduction of general and administrative costs. In 1999, the new arrangement is expected to contribute $700,000 in savings to the Fund. The arrangement provides for an incentive fee to be paid to the manager if the amount of actual distributions for the year exceeds $0.819 per unit in 1998 and $0.851 per unit in subsequent years. As a result, the manager has a major incentive to increase distributions to unitholders. Board of Directors The Fund is pleased to announce that a number of new directors have been added to the Board. The Board is now comprised of Peter A. Braaten, President and CEO of Morrison Middlefield Resources Limited, Joseph R. Dundas, former President of Westcoast Petroleums Ltd., R. M. (Bob) Shaunessy, Chief Operating Officer and Director of Rio Alto Exploration Ltd., Lloyd C. Swift, former Vice President and director of Nesbitt Burns and director of a number of public oil and gas companies and Ken S. Woolner, Operations Director of the Fund. These gentlemen provide a wealth of business and oil and gas experience and their contribution will be of tremendous benefit to the Fund. Outlook The Nevis facilities are strategic with unique processing capabilities. While the oil and gas sector has been capital constrained through much of 1998, there has been a number of equity issues completed recently, primarily for gas producers. High natural gas prices should encourage further drilling and tie-in of shut-in production as the geological potential of the area remains excellent. In addition, northeast British Columbia continues to experience growth in drilling activity which can provide further opportunities for the pipeline business. All of these factors are expected to contribute to growth in distributions. Raymond R. Pether Harry D. Cupric President & CEO Vice President, Finance & CFO This news release contains forward-looking information. Actual future results may differ materially. The risks, uncertainties and other factors that could influence actual results are described in the Fund's annual report to unitholders and other documents filed with regulatory authorities. << CONSOLIDATED BALANCE SHEETS September 30 December 31 (Unaudited, $ thousands) 1998 1997 ------------------------------------------------------------------------- Assets Current Assets Cash $ 347 $ 1,343 Accounts receivable 8,497 6,945 ------------------------------------------------------------------------- 8,844 8,288 Reclamation bond 2,648 2,495 Fixed assets 190,196 198,241 ------------------------------------------------------------------------- $201,688 $209,024 ------------------------------------------------------------------------- Liabilities and Unitholders' Equity Current Liabilities Accounts payable $ 8,258 $ 4,558 Unit distribution payable 2,575 4,159 ------------------------------------------------------------------------- 10,833 8,717 Bank debt 17,500 12,172 Pipeline obligation 2,691 6,810 Provision for future site restoration 2,836 2,654 Unitholders' equity 167,828 178,671 ------------------------------------------------------------------------- $201,688 $209,024 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF INCOME Three Months ended Nine Months ended September 30 September 30 (Unaudited, $ thousands except per unit amounts) 1998 1997 1998 1997 ------------------------------------------------------------------------- Revenues Gas processing fees $ 6,193 $ 5,945 $ 20,115 $ 24,588 Operating expenses 3,767 2,715 11,542 13,838 ------------------------------------------------------------------------- Net gas processing profits 2,426 3,230 8,573 10,750 Pipeline fees 2,637 2,395 8,188 7,068 Operating expenses 1,245 1,472 4,301 3,028 ------------------------------------------------------------------------- Net pipeline profits 1,392 923 3,887 4,040 Interest and other income 54 56 162 175 ------------------------------------------------------------------------- 3,872 4,209 12,622 14,965 Expenses General and administrative 153 161 603 512 Interest and bank charges 407 110 686 279 Depreciation & site restoration 2,263 2,187 6,316 6,355 ------------------------------------------------------------------------- 2,823 2,458 7,605 7,146 Income before taxes 1,049 1,751 5,017 7,819 Capital taxes 158 129 502 387 ------------------------------------------------------------------------- Income before restructuring costs 891 1,622 4,515 7,432 Restructuring costs - - 5,194 - ------------------------------------------------------------------------- Net income $ 891 $ 1,622 $ (679) $ 7,432 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net income per unit $ 0.05 $ 0.08 $ (0.03) $ 0.38 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF DISTRIBUTABLE CASH FLOW Three Months ended Nine Months ended September 30 September 30 (Unaudited, $ thousands except per unit amounts) 1998 1997 1998 1997 ------------------------------------------------------------------------- Net income $ 891 $ 1,622 $ (679) $ 7,432 Items to be added (deducted): Restructuring costs - - 5,194 - Depreciation & site restoration 2,263 2,187 6,316 6,355 Interest on reclamation bond (54) (46) (162) (121) Reinvestment capital (396) - (396) - Restructuring costs amortization (129) - (172) - ------------------------------------------------------------------------- Distributable cash flow $ 2,575 $ 3,763 $ 10,101 $ 13,666 ------------------------------------------------------------------------- Distributable cash flow per unit $ 0.13 $ 0.19 $ 0.51 $ 0.69 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION Nine Months ended September 30 (Unaudited, $ thousands) 1998 1997 ------------------------------------------------------------------------- Cash provided by operating activities: Net income $ (679) $ 7,432 Items not required to be deducted: Depreciation & site restoration 6,316 6,355 Interest on reclamation bond (162) (121) ------------------------------------------------------------------------- Funds from operations 5,475 13,666 Changes in non cash working capital 2,147 (3,451) ------------------------------------------------------------------------- 7,622 10,215 Provided by (used for) financing activities: Increase in bank borrowings 5,329 12,058 Distribution paid to unitholders (11,685) (9,903) Increase (decrease) in pipeline obligation (4,119) 1,411 Net proceeds on issue of trust units - 186,926 ------------------------------------------------------------------------- (10,475) 190,492 Provided by (used for) investing activities: Proceeds (expenditures) on fixed assets 1,857 (16,698) Acquisition of Nevis Facilities and BC Pipeline - (179,908) Purchase of reclamation bond - (2,329) ------------------------------------------------------------------------- 1,857 (198,935) ------------------------------------------------------------------------- Increase (decrease) in cash position (996) 1,772 Cash position - beginning of period 1,343 - Cash position - end of period $ 347 $ 1,772 ------------------------------------------------------------------------- -------------------------------------------------------------------------

To: Kerm Yerman who wrote (13723)	11/26/1998 2:23:00 AM
From: Kerm Yerman	Respond to of 15196

ASE BULLETIN / Azimuth Energy Inc. New Listing CALGARY, Nov. 25 /CNW/ - BULLETIN NO.: 9811 - 701 ORIGINAL LISTING AZIMUTH ENERGY INC. - A Junior Capital Pool Company The common shares of Azimuth Energy Inc. will be posted for trading at the opening of business on FRIDAY, NOVEMBER 27, 1998. Stock Symbol: AZE ISM Security Code: 051 592 CUSIP Number: 054782 10 7 Transfer Agent: Montreal Trust Company of Canada - Calgary Agent: Goepel McDermid Inc. Azimuth Energy Inc. has successfully completed its initial public offering of 2,000,000 common shares for total gross proceeds of $200,000. Azimuth Energy Inc. has 8,000,000 common shares issued and outstanding. Azimuth Energy Inc. is a Junior Capital Pool Company which proposes initially to identify and evaluate opportunities for the acquisition of an interest in corporations, properties, assets or businesses, and once identified, to determine the terms upon which to acquire an interest therein. The Company's contact for additional information is Mr. William H. Slavin, 4300, 400 - 3rd Avenue S.W., Calgary, Alberta T2P 4H2. Telephone: (403) 292-0692. The company announced its proposed Major Transaction in a press release issued on Wednesday, November 18, 1998.

To: Kerm Yerman who wrote (13723)	11/26/1998 2:44:00 AM
From: Kerm Yerman	Respond to of 15196

IN THE NEWS / Bonavista Petroleum praised as pick of the patch Ian McKinnon Financial Post Oilpatch analysts certainly have a rosy view of Bonavista Petroleum Ltd., but should investors look to less expensive competitors for a better return on their money? While some of its peers are rated as "buys", Bonavista carries a "strong buy" recommendation from Peters & Co. Ltd., the highest rating of the Calgary brokerage. Wilf Gobert, director of research, has a 12-month price target of $10 for Bonavista shares. He says the firm's third-quarter numbers were impressive and are one factor in his outlook. "Their numbers were spectacular, dramatically above a year ago and even well above the second quarter." Unless the picture suddenly turns ugly, there is no reason that Bonavista should not continue to command a high premium, says Kurt Molnar, a Calgary analyst with Sprott Securities Ltd., who follows the stock with partner Kirk Wilson. Mr. Molnar does not see any clouds on the horizon that would keep Bonavista, a "strong buy" selection, from achieving Sprott's 12-month price target of $10.40. "As long as the premium multiple stays there and the growth profile stays there, then clearly you can still do as well in Bonavista as you can in a lower multiple stock," he says. The premium could be destroyed if the company drastically misses its projections, a scenario Mr. Molnar dismisses as unlikely. While not cheap, the stock is worth owning because Bonavista is exposed to a hot commodity (natural gas) and demonstrates an ability to grow in tough times, says Bill Magee, a Toronto-based analyst at Credifinance Securities Ltd. "It doesn't seem to be a high multiple in light of their progress and management's capability to grow the company," he says. Mr. Magee has a "hold" rating on the stock, after recommending it as a "buy" in early September with a 12-month outlook of $8, a target that was raised to $9 in October. Good third-quarter numbers caused Bonavista stock (BNP/TSE) to rise more than 6% on Nov. 20, allowing it to hit a 52-week high of $8.40 intraday, before closing at $8.35. The low in the past year of $3.30 came on Jan. 12. The stock closed yesterday at $8.25, down 10¢. Much of the price surge is being driven by investors' and analysts' confidence in Bonavista's new management, which took over operations a year ago. Keith MacPhail, president and chief executive officer, and Ron Poelzer, vice-president and chief financial officer, concentrated in the past 12 months on cutting costs, restructuring finances, and boosting production. A series of successful acquisitions and drilling projects allowed the company to surpass expectations, sparking the stock's rise, while competitors have tanked. The two executives have a lot of Street credibility for the jobs they have done at Bonavista and other oilpatch firms. Mr. MacPhail hailed from Canadian Natural Resources Ltd. and was a key executive as it skyrocketed from a mini-producer to one of Canada's largest independents. Mr. Poelzer came from the top ranks of Poco Petroleums Ltd., a respected intermediate producer. Another reason for Bonavista's strong stock showing -- up 88% since the start of the year -- is its focus on gas. The company derives 82% of its production from gas, making it appealing to investors who are expecting normal winter weather and pipeline expansions to boost gas prices. A track record for meeting or beating projections and rapidly growing production, with further increases expected in both 1999 and 2000, are additional components that help explain the investor and analyst fan club. The bar was raised again in the firm's recent financial results. It expects to end the year producing 5,200 barrels of oil equivalent a day, up 13% from its August forecast. Bonavista anticipates daily output of between 6,200 and 6,500 boe in 1999, at least 65% greater than this year's rate of 3,750 boe a day. Stronger production and better gas prices enabled Bonavista to be one of a handful of energy firms to improve its results for the third quarter and nine months ended Sept. 30. Quarterly earnings of $1.2-million, or 6¢ a share, and cash flow of $4.2-million (20¢) came from revenue of $7.4-million. In the same period of 1997, the company had a loss of $337,000 (3¢), cash flow of $885,000 (9¢), and revenue of $3.1-million. Nine-month earnings rebounded to $3-million (14¢) from a loss of $551,000 (6¢) in 1997, while cash flow jumped 138% this year to $9.6-million (45¢). Revenue was higher at $16.8-million, compared with $9.5-million in 1997. Bonavista's results will likely be better than its peers, which include Compton Petroleum Corp., Cypress Energy Inc. and Genesis Exploration Ltd. All are gas-oriented juniors with production near or slightly above Bonavista's level. Mr. Gobert says Peters & Co. rates Compton and Cypress both as "buys." He says Bonavista is trading at six times estimated 1999 cash flow, compared with four for Cypress and 3.5 for Compton. He says Bonavista's excellent finding costs and unused gas-processing capacity are some of its competitive advantages. History has shown that "companies that trade at a high stock multiple because of their growth and credibility outperform low multiple companies," Mr. Gobert says. Says Mr. Magee of Credifinance: "I think it's a stock you still want to own."

To: Kerm Yerman who wrote (13723)	11/27/1998 5:41:00 AM
From: Kerm Yerman	Respond to of 15196

IN THE NEWS / Canadian pipeline companies exporting their expertise Foreign jobs more profitable: Opportunities growing as countries open their petroleum industries The Financial Post Large Canadian pipeline companies are increasingly turning their eyes abroad to use staff, technology and experience to earn better returns than can be generated at home. With returns in Canada set by regulation at about 10%, the chance for higher earnings in other countries has seen companies such as Enbridge Inc. (formerly IPL Energy Inc.), TransCanada Pipelines Ltd. and Westcoast Energy Inc. head to Argentina, China and Indonesia to apply their pipeline and power generation expertise to expand their businesses. And with a number of countries opening up formerly closed petroleum industries, the long-term pattern is for more earnings to come from outside Canada, company officials and analysts said. Mexico, which until recently jealously guarded its oilpatch from foreigners, is turning into an important region for Westcoast. The Vancouver-based company has a 20% interest in a $1.5-billion nitrogen project, where the gas will be used to enhance oil production, and a 45% stake in a $375-million contract to build and operate a large natural gas compression and liquids recovery plant. The latter development is scheduled to begin operations in late 1999, with the other following the next year. The international segment added $2-million to Westcoast's earnings in the nine months ended Sep. 30, tiny compared with its overall profit of $56-million. Bob Foulkes, a Westcoast spokesman, says the small contribution should grow in coming years. "I think everybody in the business knows that the regulated field is not the growth field. It's in the bigger risk, bigger reward fields of power, international, cogeneration and the integration of gas and electricity." With projects in Australia and China, Westcoast's international efforts will account for hundreds of millions of dollars in spending next year, he said. Enbridge and TransCanada each own 17.5% of an oil pipeline in Colombia, with the two firms taking annual turns at operating the 550,000-barrel-per-day line. Staff from TransCanada also need passports to work on the firm's pipeline investments in Argentina and Chile, acquired through last July's takeover of Nova Corp. Earnings from the international division after three quarters was $17-million, tiny compared to the firm's total nine-month profits of $430-million. Foreign activity by Calgary-based producers also holds potential for transporters. Exploration and production companies may be willing to bring in a familiar pipeline company for a project located a long way from Calgary. For example, Ocelot Energy Inc. may build a $70-million pipeline for an oil field in Gabon, and Pacalta Resources Ltd. is eyeing a $500-million (US) heavy oil line in Ecuador capable of moving 150,000 to 250,000 barrels a day. Canadian firms have proven records and are good at ensuring promises are kept, said Glenn Gradeen, Ocelot's chief operating officer. "We will go to bid on [the pipeline] and if there's not a significant difference in price, our preference would be to use a Canadian company," he said. Investors shouldn't pin a lot of hope on overseas deals boosting pipeline companies' earnings, said Randy Ollenberger, a Calgary analyst with Merrill Lynch & Co. The companies have a spotty record on delivering value from their foreign investments and traditional fundamentals will continue to drive most of their financial results, he said.