Arakis Energy Reports Financial Results.CALGARY, ALBERTA--(BUSINESS WIRE)--April 30, 1997--Arakis(NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on AKSEF ) Arakis Energy Corporation (NASDAQ: AKSEF) today reported a net loss of $13.4 million, or $0.24 per share, for the year ended December 31, 1996, compared with a net loss of $12.7 million, or $0.52 per share in the previous year. (All figures are in U.S. dollars in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ).The net loss in 1995 included a $5.8 million loss on sale of resource properties in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Excluding this loss on sale, the net loss in 1996 was $6.5 million higher than in the previous year, mainly due to increases in interest expense and general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. . The continued net loss position reflects the current development stage of Arakis' international concession interests. In 1996, the Company's primary focus continued to be on the exploration and development of a 12.2 million acre concession in the Republic of Sudan with a goal of achieving commercial production following construction of a 1,500 kilometer kilometer one thousand (103) meters; 3280.83 feet; five-eighths of a mile; abbreviated km. export pipeline to Port Sudan Port Sudan (s  dăn`), city (1993 pop. 308,195), NE Sudan, on the Red Sea. The country's major seaport, it handles the bulk of Sudan's foreign trade. by year end 1999. As at December 31, 1996 Arakis, through its
wholly owned subsidiary Wholly Owned SubsidiaryA subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , State Petroleum Corporation had invested approximately $100 million (U.S.) in the project which will have a total cost in excess of $1 billion (U.S) to achieve commercial production. During 1996, Arakis and State worked to form, in close cooperation with the Government of Sudan, a consortium capable of financing the export pipeline and an accelerated exploration and development program on the concession. A letter of intent was signed on December 2, 1996 concerning the interim operatorship of the concession and a consortium was formed, by agreement dated February 28, 1997, to immediately undertake the upstream and downstream components of the project. Consortium partners China National Petroleum Corporation (40 percent) and Petronas Carigali Overseas Sdn Bhd SDN BHD Sendirian Berhad (Malay equivalent to incorporated) (30 percent) have incurred substantially all consortium expenses (excluding bonuses and rentals payable) commencing November 29, 1996 and will continue until the partners have matched Arakis' agreed investment and "value-added" amounts on a pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. basis. The Arakis investment (cost) amount should approximate $100 million (U.S.)(subject to audit) and the "value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. " amount has been agreed amongst the consortium partners at $75 million (U.S.) resulting in a total credit of $175 million (U.S.). To match the total Arakis credit, the other consortium partners have to expend ex·pend tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. $525 million (U.S.) being three times the total amount credited to Arakis. Of this total, $300 million (U.S.) is allocated to exploration and development expenditures and $225 million (U.S.) to the pipeline construction. Sudapet's 5 percent share of the $525 million (U.S.) expenditures will be funded with a loan from the consortium partners, including Arakis. Arakis also announced 1996 year end gross recoverable oil reserves Oil reserves refer to portions of oil in place that are claimed to be recoverable under economic constraints. Oil in the ground is not a "reserve" unless it is claimed to be economically recoverable, since as the oil is extracted, the cost of recovery increases incrementally of 1.1 billion barrels of which 160.3 million are proven, 161.1 million are probable and 812.1 are classified as potential. The estimated reserves, including those classified as potential, relate solely to the Heglig and Unity blocks which cover approximately 20 percent of the concession area. The 1996 year end reserves were estimated by Sproule Associates Limited, an independent geological and petroleum consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a and a leading Canadian and International reserves valuator. The 1996 reserve totals compare very favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. with the 1995 year end reserves estimated by D & S International Consultants Ltd. to be 695 million barrels of which 133.7 million were proven, 180.7 million were probable and 380.6 were classified as potential. In comparing the year over year change in the gross recoverable reserves, Sproule has applied stringent criteria in estimating proven and probable reserves which has resulted in the shifting of certain reserve estimates previously classified as probable to potential. Additional development wells and delineation wells at Toma South and El Toor will be required to ultimately substantiate To establish the existence or truth of a particular fact through the use of competent evidence; to verify. For example, an Eyewitness might be called by a party to a lawsuit to substantiate that party's testimony. the reserves contained in these fields. The 1996 year end proven and probable reserve totals do not include any reserve estimates from recent discoveries at El Nar and Umm Sagura, which are still being evaluated. With the formation of the Sudan Consortium agreement dated February 28, 1997, the Company's working interest and resulting gross reserves were reduced to 25 percent of the 1996 year end totals. In exchange for this reduction in working interest and reserves, the Consortium partners have agreed to fund substantially all of the costs of ongoing exploration and development and a 1,500 kilometer export pipeline until the Arakis investment and value added amounts totalling $175 million (U.S.)(subject to audit) are matched on a pro rata basis as mentioned above.
Selected year-end 1996 data Year ended December 31
1996 1995
Financial (in accordance with U.S. GAAP)
(U.S. dollars, in thousands, except
per share amounts and reserves)
Total revenues $2,933 $1,825
Net loss $13,447 $12,704
Net loss per share $ 0.24 $ 0.52
Working capital $55,371 $ 1,888
Long term debt $ 2,863 $2,751
Shareholders' equity $185,071 $67,798
Common shares outstanding
(thousands) 87,946 30,875
Gross recoverable reserves (millions of barrels)
Proved 160.3 133.7
Probable 161.1 180.7
Potential 812.1 380.6
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1,133.5 695.0
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Conference Call
ARAKIS ENERGY CORPORATION
Mr. Lutfur Rahman Khan, Chairman and CEO
will be holding a conference call
to discuss recent announcements
Thursday, May 1, 1997
The call will commence at
8:00 a.m. Mountain Daylight Time
Dial in to participate toll free
U.S. and Canada 1-888-209-3777
Overseas call 415-537-1800 (long distance charges apply)
A question and answer segment will follow an introduction by
Mr. Lutfur Khan, Chairman and CEO
If you are unable to participate in this conference call, dial in
replay service will be available for 48 hours by calling
416-626-4100, reservation #2723641 (long distance charges will
apply).
CONTACT: Arakis Energy Corporation Kristine Dow, 403/ 263-2471 403/ 263-8069 (FAX) www.arakis.com or Arakis Energy Corporation Ron Burrows Burrows is a provincial electoral division in the Canadian province of Manitoba. It was created by redistribution in 1957, and formally came into existence in the provincial election of 1958. The riding is located in the northern part of Winnipeg. , 403/ 263-2471 403/ 263-8069 (FAX) |
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