Aspen Group Reports 2004 Results.CALGARY, Alberta -- Aspen aspen, in botany aspen: see willow. Aspen, city, United States Aspen (ăs`pən), city (1990 pop. 5,049), alt. 7,850 ft (2,390 m), seat of Pitkin co., S central Colo. Group Resources Corporation (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :ASR (Automatic Speech Recognition) Using voice recognition to replace keypad entry for telephone voice menus. Typically used to speak the digits 0 through 9 insted of keying them, ASR systems may be able to recognize a limited vocabulary. See voice recognition and AVSR. ) (Aspen), today reported its audited financial results for the year ended December 31, 2004. As reported in the third quarter of 2004, Aspen negotiated the sale of virtually all of its US oil and gas producing assets for $22 million less closing adjustments. The sale price was within the average of similar transactions for these types of assets but less than the estimated reserve value of the assets. Aspen recorded a one-time non-cash loss on the disposal of $15.8 million, or $0.24 per share. With this sale Aspen has discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: all its oil and gas operations in the US, except its exploration activities in North Dakota North Dakota, state in the N central United States. It is bordered by Minnesota, across the Red River of the North (E), South Dakota (S), Montana (W), and the Canadian provinces of Saskatchewan and Manitoba (N). and the operations of its wholly owned subsidiary Wholly Owned Subsidiary A 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. , United Cementing and Acidizing Co. Inc. ("United"). The audited financial statements for the year ended December 31, 2004 reflect such discontinuance Cessation; ending; giving up. The discontinuance of a lawsuit, also known as a dismissal or a non-suit, is the voluntary or involuntary termination of an action. DISCONTINUANCE, pleading. A chasm or interruption in the pleading. 2. . Aspen reports its results in US dollars. Results from Continuing Operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the For the year ended December 31, 2004, Aspen reported a net loss from continuing operations of $1.1 million or $0.02 per share versus a net loss of $2.7 million or $0.05 per share in 2003. Aspen generated gross revenues of $3.6 million in 2004 compared to $4.3 million for the same period in 2003. The decline is primarily the result of natural production declines from the Company's Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. producing reserves. Oil field service revenue from Aspen's wholly owned subsidiary, United Cementing and Acidizing Co. Inc., remained relatively unchanged at $1.0 million. In 2004, general and administrative (G&A) expenses decreased by 21 percent to $930 thousand, from $2.3 million in 2003 as Aspen's management continued to reduce corporate costs. Oil and gas production expense declined slightly from $1.3 million in 2003 to $1.2 million in 2004. The decrease is attributable to the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. production decline. 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. associated with United's operations, excluding general and administrative expenses increased in 2004 to $826,077 from $674,320 for the same period in 2003. The increase was attributable to added maintenance and replacement costs for service equipment. Net production in the twelve-month period averaged 326 boe/d (barrel of oil equivalent/day, 6:1 conversion) as compared to 404 boe/day in 2003. On a Full Cost Method evaluation, net book value of reserves from continuing operations increased from $4.8 million in 2003 to $5.1 million in 2004. Results from Discontinued Operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. The sale of the US assets had a closing date of October 15, 2004 and an effective date of June 1, 2004. Therefore, Aspen only received revenue and incurred expenses from these assets for 5 months in 2004. Revenue from discontinued operations totaled $2.3 million in 2004 versus $5.3 in 2003. Production and G&A expense in 2004 was $4.6 million compared to $5.6 million in the same period in 2003. Including the $15.8 million non-cash write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. , Aspen reported a loss of $18.1 million or $0.28 per share. Combined with the loss from continuing operations, Aspen reported a net loss for the year ended December 31, 2004 of $19.1 million or $0.30 per share versus a loss of $2.7 million or $0.05 per share in 2003. 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 (before changes in working capital) declined from $3.1 million or $0.06 per share in 2003 compared to a negative $1.6 million or $0.03 per share for the year ended December 31, 2004. The decline in cash flow is attributable to increased legal costs associated with ongoing litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. involving the Company. For the year ended December 31, 2004, Aspen reported positive working capital of $3.8 million from a $14 million working capital deficiency in 2003. The $17.8 million improvement is primarily due to the sale of U.S. assets and the repayment of U.S. bank debt. "Aspen has taken several important steps in transitioning from an exploitation company to an exploration company," stated Robert Calentine, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Aspen. "Those steps included the sale of its U.S. reserves and production, which enabled us to eliminate our U.S. bank debt and strengthened our balance sheet, the acquisition of the Saskatchewan properties, the North Dakota farm-in agreement with Oil for America, and most recently, the leases acquired in the Daly field in Manitoba. In 2005, we will continue the transition and focus on growing Aspen through the drill bit." Comparative summary results for the twelve-month period ended December 31, 2004 are shown in US Dollars in the following tables:
Consolidated Audited Summary Balance Sheet as at
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(In US Dollars)
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Dec. 31, 2004 Dec. 31, 2003
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(audited) (audited)
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Assets
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Cash and Current assets $ 7,878,635 $ 5,189,120
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Proved oil and gas properties (net
of depletion) 5,085,989 4,829,975
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Divested proved oil and gas
properties (net of depletion) - 34,054,641
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Property, equipment and other assets
(net of depreciation) 812,444 947,075
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Total Assets $ 13,777,068 $ 45,020,811
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Liabilities and Stockholders' Equity
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Accounts payable and accrued
interest and expenses $ 3,182,273 $ 5,853,165
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Current maturities of long-term debt 858,116 13,443,332
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Total Current Liabilities 4,040,353 19,296,497
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Long-term debt, net of current
maturities 215,868 99,005
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Provision for Site Restoration 563,236 317,846
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Stockholders' Equity 8,957,611 25,307,463
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Total Liabilities and Stockholders'
Equity $ 13,777,068 $ 45,020,811
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Consolidated Summary Statements of Operations
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(In US Dollars) audited
Years ended December 31
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Dec. 31, 2004 Dec 31, 2003
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(audited) (audited)
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Continuing Operations
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Revenue $ 3,677,201 $ 4,330,402
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Expenses 4,769,282 7,064,737
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Loss from Continuing Operations (1,092,081) (2,734,335)
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Other income 109,251 237,580
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Discontinued Operations
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Revenue from divested assets 2,293,495 5,389,808
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Expenses from divested assets 4,606,038 5,610,715
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Non-cash write-down on sale 15,776,240 -
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Loss from Discontinued Operations (18,088,783) (220,907)
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Loss per share from Continuing
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Operations $ (0.02) $ (0.05)
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Net loss per share $ (0.30) $ (0.05)
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Weighted average number of shares 64,522,558 50,030,092
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Total shares outstanding 71,203,037 51,378,037
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For complete financial statements, please refer to the Company's filings with SEDAR SEDAR System for Electronic Document Analysis and Retrieval SEDAR Southeast Data, Assessment, and Review at www.sedar.com Aspen Group Resources Corporation is an independent oil and natural gas producer engaged in the acquisition, exploration, production and development of oil and natural gas properties in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Aspen's shares trade on The Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. under the symbol "ASR". Portions of this document include "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. ", which may be understood as any statement other than a statement of historical fact. These statements are based on managements' current expectations and are subject to uncertainty and changes in circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . Forward-looking statements may include, but are not limited to, statements concerning estimates of recoverable hydrocarbons hydrocarbons (hīˈ·drō·kärˑ·b  nz),n. , expected hydrocarbon hydrocarbon (hī'drōkär`bən), any organic compound composed solely of the elements hydrogen and carbon. The hydrocarbons differ both in the total number of carbon and hydrogen atoms in their molecules and in the proportion of hydrogen prices, expected costs, statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the continued advancement of the Joint Venture's projects and other statements which are not historical facts. When used in this document, and in other published information of Westchester and Aspen, the words such as "could," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are indicative of a forward-looking statement. Although Westchester and Aspen believe that their expectations reflected in the forward-looking statements are reasonable, the potential results suggested by such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Forward-looking statements contained in this document are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 and other applicable securities laws. Certain factors that can affect Westchester's and Aspen's ability to achieve projected results are described in Aspen's Annual Report and Form 20-F, and other reports filed by both companies with the applicable Canadian securities regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities and by Aspen with the US Securities and Exchange Commission. Factors that can affect the ability of Aspen and Westchester to achieve projected results include, among others, production variances from expectations, uncertainties about estimates of reserves, volatility of oil and gas prices, the need to develop and replace reserves, the substantial capital expenditures required to fund operations, environmental risks, drilling and operating risks Operating risk The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. , risks related to exploratory and developmental drilling, competition, government regulation, the ability of Aspen and Westchester to implement its business strategy, the potential that projects will experience technical and mechanical problems, geological ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. conditions in the reservoir which may negatively impact levels of oil and gas production and changes in product prices and other risks not anticipated by the Joint Venture or disclosed in published material of Westchester or Aspen. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. ASPEN GROUP RESOURCES CORPORATION (TSX:ASR) |
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