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ENCOR INC. ANNOUNCES RESULTS

 CALGARY, Alberta, March 1 /PRNewswire/ -- Encor Inc. (Toronto, Montreal: ECR) today announced its financial and operating results for the year ended Dec. 31, 1992. Funds generated from operations for the year of $66.4 million or $0.42 cents per common share ($0.27 cents per common share, fully diluted) were essentially unchanged from 1991 as lower financial charges were largely offset by higher cash taxes and a decline in net revenues. The $11.9 million reduction in financial charges was largely attributable to lower average interest rates during 1992 while the additional cash taxes related to a $9.0 million assessment in Italy on the disposal of the company's oil and gas interests in that country.
 Despite a reduction of $18.1 million in hedging revenue in 1992, net revenues for the year of $256.7 million were down just $7.1 million compared to 1991. Higher production volumes resulted in a $15.0 million increase in revenues which was partially offset by higher royalties and lower average product prices of $3.2 million and $0.8 million respectively.
 Natural gas production increased by 28 percent to 212 million cubic feet per day while oil and natural gas liquid volumes declined by 9 percent to 30,312 barrels per day. The increase in natural gas production was primarily a result of new gas sales and changes in the composition of production resulting from the rationalization property swap completed with Amoco Canada Petroleum Ltd. and Maligne Resources Ltd. on March 1, 1992. The property swap also largely accounted for a 5 percent decline in Canadian oil and natural gas liquids production. Oil production from the company's interests in Indonesia decreased by 23 percent due to normal production declines.
 Cash expenses decreased by $6.8 million to $145.4 million for the year ended Dec. 31, 1992. Production expenses of $110.5 million were down 5 percent on a unit of production basis from 1991 levels due to the additional control which Encor was able to exercise over costs subsequent to rationalization combined with higher levels of production. General and administrative expenses were reduced by $0.7 million to $25.6 million for the year ended Dec. 31, 1992. A reduction in activity levels in Canada and the successful use of farmouts internationally resulted in a decrease in exploration expenses from $15.0 million in 1991 to $9.3 million for 1992.
 Non-cash expenses increased from $125.6 million for 1991 to $148.5 million for the current year due primarily to a higher provision for depletion, depreciation and amortization in 1992 of $22.5 million. This increase reflects higher production volumes and an increase in the depletion and depreciation rate which did not become effective until the fourth quarter of 1991 following a downward revision to the company's proved natural gas reserves at that time. Amortization of undeveloped rights, which increased from $17.5 million in 1991 to $27.7 million, includes a provision for impairment of $15.4 million related to certain of the company's landholdings. Dry hole and abandonment costs were $9.8 million lower in 1991 than in 1990.
 In order to reduce its bank debt, Encor initiated an asset disposition program during 1992 which resulted in the sale of selected international and Canadian properties for net cash proceeds of $220.1 million. Losses of $21.4 million were recorded on these dispositions in 1992 compared to gains of $8.4 million recognized in 1991 on dispositions completed at that time. The company also recorded a writedown of $23.2 million in 1992 in respect of certain assets which the company proposes to exchange in return for a release from an arrangement entered into by a predecessor corporation.
 In 1992 Encor recorded a foreign exchange loss of $16.3 million compared to a foreign exchange gain recognized in 1991 of $1.1 million. The foreign exchange loss recorded in 1992 was due primarily to the impact of the deterioration in value in the Canadian dollar during 1992 on the company's term bank loan which is denominated in U.S. dollars. Foreign exchange amounts previously deferred in respect of this loan were fully amortized at Dec. 31, 1992 as it is expected that the loan will be refinanced in 1993.
 Income and other taxes of $17.2 million for 1992 were virtually unchanged from 1991 despite a $79.9 million increase in the loss before taxes. This relative increase in the income tax provision was largely attributable to the losses arising on the Canadian property dispositions as the related property costs were only partially deductible for tax purposes.
 The net loss applicable to common shares for the year amounted to $170.1 million or $1.08 per share compared to a net loss of $89.7 million or $0.58 per share for the same period in 1991. Of the net loss recorded in 1992, $82.2 million or $0.52 per common share resulted from non-recurring losses attributable to asset dispositions, asset writedowns and impairment and an accelerated provision for foreign exchange losses.
 Capital expenditures and exploration expenses for 1992 were $30.7 million, down 65 percent from 1991. Canadian spending totalled $21.5 million, down $40.1 million from 1991 levels while internationally, capital expenditures and exploration expenses declined from $25.1 million in 1991 to $9.2 million during 1992.
 Encor also announced today that the company has completed the dispositions of selected properties in Alberta for net cash proceeds of $143.7 million. The proceeds from the domestic sales, combined with those from international sales and the application of cash flow, have reduced long-term bank debt since Dec. 31, 1991 by $250 million to less than $130 million. As a result, the company fully expects that the borrowing base deficiency under its production loan facility has been eliminated. Confirmation to that effect is expected from the lenders following completion of their review of the Dec. 31, 1992 reserve report.
 The waiver to Feb. 28, 1993, previously agreed to by the banking syndicate for the company to eliminate the borrowing base deficiency, has been extended to April 30, 1993 to allow time for the banks to complete their review of Encor's year end reserves and to complete the new loan agreement currently being negotiated. The waiver extension also covers the covenant to maintain consolidated shareholders' equity at $500 million, which will be addressed in the new loan agreement.
 Encor's common shares trade on The Toronto Stock Exchange and the Montreal Exchange under the symbol "ECR."
 ENCOR INC. Financial Highlights (millions of dollars except per share amounts)
 Quarter Ended Year Ended
 Dec. 31, Dec. 31,
 1992 1991 1992 1991
 Revenues, net of royalties 69.0 69.2 256.7 263.8
 Funds generated from
 operations 17.7 19.5 66.4 66.1
 Per common share
 Basic $0.11 $0.13 $0.42 $0.43
 Fully diluted $0.07 $0.08 $0.27 $0.28
 Net Loss 112.7 21.7 155.2 75.6
 Provision for redemption
 premium on convertible
 preferred shares 3.8 3.5 14.9 14.1
 Net loss applicable
 to common shareholders 116.5 25.2 170.1 89.7
 Loss per common share $0.74 $0.16 $1.08 $0.58
 Capital expenditures and
 exploration expenses 6.8 26.1 30.7 86.7
 Operations
 Average Daily Production
 Oil and natural gas
 liquids (Bbls) 28,208 32,279 30,312 33,143
 Natural gas (MMcf) 219 197 212 166
 Average Prices
 Oil and natural gas
 liquids ($/Bbl) 21.42 19.66 20.07 18.86
 Natural gas ($/Mcf) 1.41 1.28 1.25 1.35
 -0- 3/1/93
 /CONTACT: E. Susan Evans, VP-law and corporate affairs, 403-231-6066/
 (ECR.)


CO: Encor Inc. ST: Alberta IN: OIL SU: ERN

KJ -- LA027 -- 1701 03/01/93 21:10 EST
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Date:Mar 1, 1993
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