Anderson Exploration Inc. Announces its Financial and Operating Results for its Fiscal 1998 First Quarter Ending December 31, 1997.CALGARY Calgary (kăl`gərē), city (1991 pop. 710,677), S Alta., Canada, at the confluence of the Bow and Elbow rivers. The largest city in Alberta and the fastest-growing major city in Canada, Calgary is a corporate, transportation, and financial , ALBERTA--(BUSINESS WIRE)--Feb. 11, 1998-- Anderson Anderson, river, Canada Anderson, river, c.465 mi (750 km) long, rising in several lakes in N central Northwest Territories, Canada. It meanders north and west before receiving the Carnwath River and flowing north to Liverpool Bay, an arm of the Arctic (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :AXL.) At its Annual General Meeting of Shareholders today in Calgary, Anderson Exploration Ltd. announced its financial and operating results for the first quarter of fiscal 1998 which ended on December December: see month. 31, 1997. The Company met its production targets for the first quarter, recording a seven percent increase in production over the same period in the previous year. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was $90.8 million or $0.74 per share and earnings were $11.3 million or $0.09 per share. Natural gas sales averaged 561 million cubic feet per day in the quarter compared to 542 million cubic feet per day last year. Increases in gas production were largely due to a successful drilling and acquisition program in northeastern British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography in the last half of fiscal 1997. Oil and natural gas liquid sales increased 12 percent to 37,229 barrels per day Barrels per day (abbreviated BPD, bbl/d, bpd, bd or b/d) is a measurement used to describe the amount of crude oil (measured in barrels) produced or consumed by an entity in one day. from 33,165 barrels per day. The acquisition of an additional interest in Swan swan, common name for a large aquatic bird of both hemispheres, related to ducks and geese. It has a long, gracefully curved neck and an extremely long, convoluted trachea which makes possible its far-carrying calls. Hills and development work in eastern Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. and Saskatchewan Saskatchewan, province, Canada Saskatchewan (səskăch`əwən, –wän', săs'–), province (2001 pop. 978,933), 251,700 sq mi (651,903 sq km), W Canada. were the major contributors to the increase, offset somewhat by the disposal of the Company's interests in Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. which contributed 1,550 barrels per day in the first quarter of last year. Natural gas prices were similar to last year but crude oil and natural gas liquids prices were 24 percent lower. As expected, these lower prices, combined with higher costs, resulted in a decrease in cash flow and earnings from the same period in the previous year. Lower prices more than offset the increases in production resulting in a decrease in revenues. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. increased as a result of increased heavy oil production, the continuation of workover programs at Swan Hills and Eagle and overall increases in costs throughout the industry. General and administrative expenses remained at the same low levels of previous years. Net capital expenditures of $214.6 million for the first three months of the year represent over 40 percent of the Company's annual budget for fiscal 1998. These expenditures include the purchase of an additional interest in the Company operated Swan Hills Unit No. 1 for $98 million and $14 million of pipeline expenditures related to the northern pipeline expansion project being carried out by Federated Connected and treated as one. See federated database and federated directories. Pipe Lines Ltd. Long term debt has increased to $670.4 million as a result of these expenditures. The Company drilled 132 gross (98 net) wells in the quarter and participated in the construction of several new facilities. The most active drilling area was in the Peace River Arch where a total of 42 wells were drilled. An 18 million cubic feet per day gas plant was constructed at Normandville to process both sweet and sour sweet and sour adj → agridulce gas and 15 wells were tied in to the plant. At Gainsborough, a new oil battery was constructed. Anderson Exploration is now in the midst Adv. 1. in the midst - the middle or central part or point; "in the midst of the forest"; "could he walk out in the midst of his piece?" midmost of an active winter drilling program with activity focused on gas prospects in northeastern Alberta and northeastern British Columbia. The Company is still operating on a total capital budget of $505 million for fiscal 1998. However, the outlook for commodity prices, particularly oil, is significantly lower than the Company's expectation at the time of budgeting. If prudent, the Company may cut its capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. in the second half of the year if prices continue to deteriorate de·te·ri·o·rate v. 1. To grow worse in function or condition. 2. To weaken or disintegrate. . In Anderson Exploration's 1997 annual report, the Company indicated that it expected to see significant increases in production volumes in fiscal 1998, but that the first half financial results would not meet the prior year's results. The Company now extends that latter feeling to the financial results for the whole year. The Company still feels the outlook for future natural gas prices is very positive. The construction of additional pipeline capacity to supply export markets has already begun and, by November November: see month. 1998, significant increases in export capacity will be available. This should result in higher natural gas prices for Alberta producers. The recent reduction in crude oil prices and the postponement of many heavy oil projects should cause a decrease in industry activity levels once the winter drilling season is over. This may well moderate some of the upward pressure on costs that has been experienced at high activity levels. -0-
Three months ended
December 31
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1997 1996
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FINANCIAL, millions of dollars
(except per share amounts)
Total Revenue Before
Deducting Royalties $ 195.2 $ 207.1
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Cash Flow From Operations
Oil & gas $ 88.5 $ 116.7
Pipeline $ 2.3 $ 2.6
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Total $ 90.8 $ 119.3
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Per share $ 0.74 $ 0.98
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Earnings
Oil & gas $ 9.7 $ 35.4
Pipeline $ 1.6 $ 1.8
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Total $ 11.3 $ 37.2
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Per share $ 0.09 $ 0.31
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Net Capital Expenditures $ 214.6 $ 72.2
Long Term Debt $ 670.4 $ 497.1
Long Term Debt/Cash
Flow (Annualized) $ 1.8 $ 1.0
Working Capital (Deficiency) $ (13.2) $ 22.6
Shareholders' Equity $ 998.2 $ 924.9
Shares Outstanding (millions)
At End of Period 122.4 121.6
Weighted Average During Period 122.4 121.3
OPERATIONS
PRODUCTION/SALES
Natural Gas (Mmcf/d) 561 542
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Oil (Bbls/d) 30,700 26,464
NGL (Bbls/d) 6,529 6,701
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Total Liquids (Bbls/d) 37,229 33,165
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PRODUCT PRICES
Natural Gas ($/Mcf) $ 2.11 $ 2.07
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Oil ($/Bbl) $ 22.52 $ 29.36
NGL ($/Bbl) 21.86 29.50
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Total Liquids ($/Bbl) $ 22.40 $ 29.39
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CANADIAN OPERATING
NETBACKS ($/BOE(x))
Oil & Gas Revenue $ 21.65 $ 24.00
Royalties $ (4.31) $ (3.97)
Operating Costs $ (5.16) $ (3.83)
G&A $ (0.78) $ (0.78)
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Netback $ 11.40 $ 15.42
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(x) Gas converted to Oil @ 10 Mcf/Bbl
GROSS NUMBER OF WELLS DRILLED IN CANADA
Oil Wells 64 121
Gas Wells 46 40
Dry Holes 22 26
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132 187
Service Wells - 27
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Total Wells 132 214
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Anderson Exploration Ltd. is a Calgary based oil and gas company operating exclusively in western Canada
Western Canada, commonly referred to as the West . Its common shares trade under the symbol "AXL" on The Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. . CONTACT: Anderson Exploration Ltd. J.C. Anderson, 403/ 232-7100 or Anderson Exploration Ltd. Larry Lar´ry n. 1. Same as Lorry, or Lorrie. J. Macdonald Mac·don·ald , Sir John Alexander 1815-1891. Canadian politician and the first prime minister of the Dominion of Canada (1867-1873 and 1878-1891). He is considered the organizer of the Canadian confederation, established in 1867. , 403/ 232-7100 or Anderson Exploration Ltd. David G. Scobie, 403/ 232-7100 |
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