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DEKALB ENERGY HAS NET INCOME OF $2.4 MILLION IN FOURTH QUARTER

 -- Reports 1992 Full Year Loss Due To Sale Of
 U.S. Properties and Asset Writedowns --
 CALGARY, Alberta, Feb. 25 /PRNewswire/ -- DEKALB Energy Company (NASDAQ-NMS: ENRGB) reported today that higher natural gas prices and lower interest expense led to improved financial results in the fourth quarter. For the three months ended Dec. 31, 1992, DEKALB reported net earnings of $2.4 million, or 25 cents per share, compared with a net loss of $15.4 million, or $1.61 per share, in the year-ago period. The net loss for the fourth quarter of 1991 included an $18.6 million (pretax and after-tax) writedown of the company's U.S. properties.
 For the full year, DEKALB reported a net loss of $70.3 million, or $7.30 per share, compared with a net loss of $62.6 million, or $6.51 per share, in 1991. The 1992 loss included first-quarter writedowns of $53.3 million (pretax) on the company's U.S. and Canadian properties.
 DEKALB also reported a pretax charge of $34.9 million on the disposal of its U.S. assets. In 1991, DEKALB took pretax writedowns of $94.2 million on its U.S. assets. These writedowns, required by the U.S. Securities and Exchange Commission to reflect lower energy prices, do not affect cash flow.
 DEKALB also reported that the pretax SEC value of its Canadian reserves rose 3 percent to $205.2 million at Dec. 31, 1992 from $198.8 million the previous year. The increase was due to higher gas prices, partially offset by the lower value of the Canadian dollar. Including California reserves -- the company's only remaining U.S. assets -- DEKALB's total pretax SEC value was $210.4 million in 1992. Net of cash and debt, the total pretax SEC value stood at $159.2 million at year end 1992, a $1 million improvement over the previous year. At Dec. 31, 1992, the company's Canadian natural gas reserves in Canada totaled 271.8 billion cubic feet (BCF), down 3 percent from 280.7 BCF the prior year. Canadian liquid reserves were 14.0 million barrels (MMbbls), compared with 14.4 MMBbls at the end of 1991.
 "Although SEC reserve value is only a 'snapshot,' it is important to note that we maintained this value year to year," said Bruce P. Bickner, chairman. "At the same time, we strengthened the company by divesting non-competitive U.S. operations and significantly reducing debt. Year- to-year comparisons are difficult because of the writedowns and because the effective date for selling our U.S. assets was July 1, 1992. However, our most important accomplishments in 1992 were narrowing our focus to Canada -- where we have maintained a successful program for 35 years -- and applying proceeds from the asset sale to reducing debt. We believe DEKALB Energy's competitive position is now much stronger. We have also worked to lower our cost structure, which will help improve our 1993 financial results," Bickner said.
 Fourth-Quarter Results
 Operating revenues for the quarter fell to $13.0 million, down $11.8 million from the prior year, primarily as a result of the U.S. asset sale. Canadian natural gas sales were slightly lower when compared with the previous year because the company did not repeat its 1991 gas storage program. "We were unable to get transportation to the upper Midwest last summer that would have allowed us to store gas for sale in the fourth quarter," Bickner said. "On an annual basis, however, we compensated for the lower exports with higher sales
to system purchasers and direct markets. We also brought onstream in the fourth quarter of


1992 DEKALB's first gas production in British Columbia."
 Due to better spot and term prices, DEKALB's average Canadian gas price in the fourth quarter increased to $1.42 per thousand cubic feet (MCF), a 17 percent improvement over 1991's fourth quarter. The average fourth quarter gas price also represented a significant improvement over the third quarter average of $1.06 per MCF. The average U.S. gas price was $1.83 per MCF, up 5 percent over last year. The company's average Canadian oil price declined 3 percent to $19.19 per barrel.
 Other income of $1.1 million in the fourth quarter of 1992 was due to U.S. accrual reversals. Net income was $2.4 million compared with a net loss of $15.4 million in the fourth quarter of 1991.
 Year-End Results
 Operating revenues for 1992 declined by 36 percent to $60.7 million; again, as a result of the U.S. asset sale. Total sales volume in Canada was essentially flat compared with 1991. DEKALB reported Canadian natural gas sales of 17.3 BCF for the year and liquids sales of 996,000 barrels.
 Despite higher prices in the fourth quarter, the average Canadian gas price for the year declined 5 percent to $1.16 per MCF. The average U.S. gas price fell 5 percent to $1.58 per MCF. DEKALB's average Canadian oil price was $18.37 per barrel, 8 percent lower than in 1991.
 During 1992, the company lowered its Canadian operating costs by 6 percent to $2.99 per barrel of oil equivalent. In addition, DEKALB reduced Canadian general and administrative expense 13 percent. Depreciation, depletion and amortization in Canada was also down, resulting primarily from the first-quarter 1992 writedown.
 Cash flows from continuing operations decreased to $31.5 million from $43.4 million in 1991. The decline was due to the U.S. asset sale.
 Financial Position
 DEKALB improved its total debt-to-total market capitalization ratio to 39.9 percent at year end 1992 from 57.6 percent a year earlier. At December 31, 1992, DEKALB's total debt was $70.1 million, almost $100 million less than at year end 1991.
 The company repaid its bank line of credit in full during 1992 and repurchased $55.3 million of its public notes. Since year end, DEKALB has repurchased an additional $4.9 million of public notes.
 The company noted that the effect of Statement of Financial Accounting Standards (SFAS) 109 "Accounting for Income Taxes" is required to be adopted in the first quarter of 1993 and is estimated to have a positive effect on the company's financial statements. SFAS 106 "Employers' Accounting for Post-Retirement Benefits Other Than Pensions" will have no effect on DEKALB's financial statements.
 DEKALB Reduces Board Size
 DEKALB also announced that it is reducing the size of its board of directors from eleven to six, consistent with the current size of the company. The following directors will resign from the board, effective March 1, 1993: Frank L. Bauer, Joseph O. Carter, Joe S. Farmer, John T. Roberts and Thomas H. Roberts III.
 DEKALB Energy Company is engaged in oil and gas exploration and production in Canada and California. The company's Class B Common Stock is traded on NASDAQ-NMS under the symbol ENRGB.
 DEKALB ENERGY COMPANY
 Condensed Consolidated Statements of Earnings
 (Unaudited, in thousands, except per share amounts)
 Period Ended Twelve Months Three Months
 December 1992 1991 1992 1991
 Operating revenues $60,733 $94,692 $12,987 $24,797
 Operating expenses 136,058 177,779 7,849 40,011
 Income (loss) from
 operations -75,325 -83,087 5,138 -15,214
 Interest expense, net 6,938 10,902 853 2,500
 Other (income), net -3,222 -6,250 -1,130 -3,920
 Earnings (loss) from
 continuing operations
 before income taxes -79,041 -87,739 5,415 -13,794
 Income tax provision
 (benefit) -9,788 -25,153 3,018 1,637
 Earnings (loss) from
 continuing operations -69,253 -62,586 2,397 -15,431
 Loss from operations of
 discontinued businesses -1,050 0 0 0
 Net earnings (loss) -$70,303 -$62,586 $2,397 -$15,431
 Earnings (loss) per
 common share:
 Earnings (loss) from
 continuing operations -$7.19 -$6.51 $0.25 -$1.61
 Loss from discontinued
 operations -0.11 0.00 0.00 0.00
 Net earnings (loss)
 per share -$7.30 -$6.51 $0.25 -$1.61
 Dividends per share $0.00 $0.08 $0.00 $0.00
 Weighted average common
 shares outstanding 9,630 9,618 9,665 9,609
 DEKALB ENERGY COMPANY
 Condensed Consolidated Balance Sheets
 (Unaudited, in thousands)
 Period Ended December 31, 1992 1991
 Cash and cash equivalents $18,872 $2,117
 Receivables 10,116 24,080
 Other current assets 989 3,073
 Property, plant and
 equipment, net 182,130 383,362
 Other non-current assets 6,878 12,399
 Total assets $218,985 $425,031
 Current liabilities $18,957 $31,840
 Deferred credits, primarily
 income taxes 34,716 41,427
 Long-term debt 69,725 167,407
 Total liabilities 123,398 240,674
 Shareholders' equity 95,587 184,357
 Total liabilities and
 shareholders' equity $218,985 $425,031
 DEKALB ENERGY COMPANY
 Condensed Consolidated Statements of Cash Flows
 (Unaudited, in thousands)
 Twelve Months Ended December 1992 1991
 Net loss from continuing operations -$69,253 -$62,586
 Adjustments to reconcile net
 loss to net cash provided by
 operating activities:
 Depreciation, depletion and
 amortization 22,522 41,080
 Provision for impairment of oil
 and gas properties 53,320 94,241
 Benefit for deferred income taxes -8,342 -27,291
 Loss on disposal of U.S. assets 34,942 --
 Other -1,176 -1,544
 32,013 43,900
 Changes in assets and liabilities -552 -479
 Cash flows from continuing operations 31,461 43,421
 Cash flows from discontinued operations 480 919
 Net cash flows from operating activities 31,941 44,340
 Net cash flows from investing activities 84,516 -25,236
 Net cash flows from financing activities -99,568 -27,539
 Net effect of exchange rates on cash -134 65
 Net increase (decrease) in cash and
 cash equivalents $16,755 -$8,370
 DEKALB ENERGY COMPANY
 Selected Operating Statistics
 Average Prices & Sales
 Period Ended Twelve Months Three Months
 December 1992 1991 1992 1991
 Oil and condensate
 (dollars per barrel):
 United States $16.97 $18.97 $0.00 $19.28
 Canada 18.37 19.97 19.19 19.83
 Total Company 17.74 19.32 19.19 19.49
 Natural gas (dollars per
 thousand cubic feet):
 United States $ 1.58 $1.67 $1.83 $1.75
 Canada 1.16 1.22 1.42 1.21
 Total Company 1.28 1.41 1.45 1.42
 Oil, condensate and
 natural gas liquids
 (thousands of barrels):
 United States 765 1,856 0 417
 Canada 996 1,025 266 274
 1,761 2,881 266 691
 Natural gas
 (million cubic feet):
 United States 6,671 12,511 437 3,303
 Canada 17,309 17,030 5,118 5,160
 23,980 29,541 5,555 8,463
 Oil, natural gas
 liquids and gas
 equivalents (thousands
 of barrels)(A):
 United States 1,877 3,941 73 967
 Canada 3,881 3,863 1,119 1,135
 5,758 7,804 1,192 2,102
 (A) Gas converted to oil at 6,000 cubic feet per barrel.
 -0- 2/25/93
 /CONTACT: Kristin Lavelle, investor relations of DEKALB Energy Company, 403-261-1277/
 (ENRGB)


CO: DEKALB Energy Company ST: Alberta IN: OIL SU: ERN

LD -- NY006 -- 0204 02/25/93 07:32 EST
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