Olympia Energy Inc. Announces Its First Quarter 2002 Cash Flow And Earnings.Business Editors 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)--May 28, 2002 OLYMPIA Olympia, city, ancient Greece Olympia, ancient city, important center of the worship of Zeus in ancient Greece, in Elis near the Alpheus (now Alfiós) R. It was the scene of the Olympic games. ENERGY INC inc - /ink/ increment, i.e. increase by one. Especially used by assembly programmers, as many assembly languages have an "inc" mnemonic. Antonym: dec. . is pleased to announce the Company's results and supplementary data for the three-month period ended March 31, 2002.
HIGHLIGHTS
OPERATING
2002 2001 Change
Three Three
Months Months
March 31, March 31,
-----------------------------
PRODUCTION (6:1)
Barrels of oil sold per day 610 414 47.3
Millions of cubic feet of gas
sold per day 16.7 17.7 -5.6
Barrels of natural gas liquids
sold per day 553 606 -8.7
Barrels equivalent production
per day 3,952 3,977 -0.6
PRICES $ $
Natural gas / Mcf 3.37 9.65 -65.1
Oil /Bbl 27.94 42.41 -34.1
Natural gas liquids / Bbl 19.73 39.72 -50.3
OPERATIONS $ $
Field net back per barrel
equivalent 13.11 37.64 -65.2
Operating expenses per
barrel equivalent 4.86 4.83 0.6
General and administrative
per barrel
equivalent 1.96 1.77 10.7
Depletion and depreciation
per barrel
equivalent 9.57 7.14 34.0
Royalties as a percentage
of sales 15.8% 20.6% -23.3
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DRILLING ACTIVITY
Wells Drilled - Gross 11 1 10
Wells Drilled - Net 5.9 1 4.9
FINANCIAL
------------------------
2002 2001
------------------------
Three Three
Months Months
March 31, March 31,
------------------------
Weighted average
shares outstanding
Basic 37,407,864 36,953,910
Diluted 38,169,600 37,542,544
Per share amounts
Basic
Cash Flow $0.09 $0.34
Earnings $0.003 $0.18
Diluted
Cash Flow $0.09 $0.33
Earnings $0.003 $0.17
FINANCIAL RESULTS (unaudited) 2002 2001 Change
Three Three
($000's except Months Months
where noted) March 31, March 31,
$ $
Oil Sales 1,534 1,579 -2.8
Gas Sales 5,076 15,419 -67.1
Liquid Sales 982 2,166 -54.7
-------------------------
7,592 19,164
-------------------------
Royalties 1,201 3,963 -69.7
Operating Expenses 1,729 1,730 -0.00
-------------------------
2,930 5,693
-------------------------
Field Net Back 4,662 13,471 -65.3
General & Administrative Expenses 698 635 10.0
Interest 350 316 10.5
-------------------------
Corporate Net Back 3,614 12,520 -71.1
-------------------------
Depletion & Depreciation 3,403 2,554 33.2
Current Income Taxes 229 - -
Future Income Taxes (140) 3,452 -
-------------------------
Net After-Tax Earnings 122 6,514 98.1
-------------------------
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BALANCE SHEETS 2001 Change
(unaudited) March 31, December 31,
------------------------------
($000's except where noted)
Net working capital (deficiency) 1,979 (343) 677.3
Bank debt 39,040 35,952 8.5
Total assets 117,144 115,953 1.0
OPERATIONS During the first quarter of 2002, the Company acquired 8,320 acres of highly prospective lands from the Stoney ston·ey adj. Variant of stony. First Nation at Big Horn Big Horn is a tall peak in the Cascade Range in Washington, USA. At 2438+ meters (8,000 feet) in elevation, it is the highest point in Lewis County, Washington.[1] Big Horn, one of the Goat Rocks, is the second highest point on the ridge west of Mt. (Jumping Pound West), near Wildcat Hills The Wildcat Hills are an escarpment between the North Platte River and Pumpkin Creek in the western Nebraska Panhandle. Located in Banner, Morrill, and Scotts Bluff counties, the high tableland between the streams has been eroded by wind and water into a region of forested buttes, . The Company also purchased a 50% interest in two sections of shallow gas land at Atlee Buffalo at Crown sales as well as negotiated a farm in from an industry partner on an additional 16,640 acres of option land at Cadotte to add to its significant land holdings in the area. The Company participated in 8 wells at Cadotte (4.25 net), 1 well at Klua (.125 net), 1 oil well at Atlee Buffalo (1 net) as well as 1 well at Boltan (.27 net). In addition, the Company retains a 15% royalty interest royalty interest The proportional ownership interest by the owner of oil and gas rights in income produced by the asset. See also overriding royalty interest. (35 % working interest after payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. ) in a well drilled by industry partners in the Little Horse area. All 8 Cadotte wells were cased and are awaiting further evaluation. As drilling in this area is winter only, further development drilling on the 3 new pool discoveries will commence in December December: see month. of this year. The Company has committed to a seismic program in the Klua area. We believe that this area is highly prospective for large accumulations of natural gas in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite drilling a dry hole during the first quarter. In February February: see month. , the Company tested a Glauconite glau·co·nite n. A greenish mineral of the mica group, a hydrous silicate of potassium, iron, aluminum, or magnesium, (K,Na)(Al,Fe,Mg)2(Al,Si)4O10(OH)2 oil pool adjacent to the existing production at Atlee Buffalo. The horizontal aspect of this well encountered 588 metres of excellent reservoir reservoir (rĕz`əvôr, -vwär), storage tank or wholly or partly artificial lake for storing water. Building an embankment or dam to preserve a supply of water for irrigation is an ancient practice; India and Egypt have many old and . The well was placed on production and is currently flowing at approximately 120 barrels of oil per day plus 1.5 million of natural gas. An additional 10 wells have since been drilled in this area as a follow up to this discovery. All of these wells will be placed on production in June June: see month. 2002. We expect that this development at Atlee Buffalo will increase the Company's production levels by as much as 1,500 boe/d by the end of the second quarter. Subsequent to the first quarter, a third pool was drilled in this area. Further testing may reveal another 10-12 well program on this anomoly. The Boltan well has been the subject of much speculation. The well has been cased and operations have been suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. due to breakup breakup The division of a company into separate parts. The most famous breakup to date was the 1984 division of AT&T (formerly, American Telephone & Telegraph Company). This breakup was intended to increase competition in the communications industry. . The Company remains encouraged about this project based on the information accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. to date. A seismic program has been shot at Big Horn (Jumping Pound West). The prospect is on trend with a prolific well to the North. The preliminary results appear to be very promising and support our 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. model. We expect to drill a well on this prospect in the third quarter of 2002. FINANCIAL Net debt increased from $36.3 million at year end, 2001 to 37.1 million by the end of first quarter 2002. Drilling exploration and land acquisition spending outstripped cash flow by the amount of the difference. Over the course of the year, however, capital expenditures are expected to match cash flow. The Company's capital expenditure program for the first three months of 2002 comprised the following:
In 000's
Seismic and other geological expenditures $404
Drilling and completions 2,854
Facilities and equipment 614
Land and lease acquisition 234
Other 26
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$4,132
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Production for the first three months averaged 3,952 (2,836 - 10:1) barrels equivalent per day comprised of 16.7 million cubic feet of natural gas and 1,163 barrels of oil and natural gas liquids. Last year's production figures were 3,977 barrels equivalent per day (2,794 - 10:1) comprised of 17.7 million cubic feet per day of natural gas and 1,020 barrels of oil and natural gas liquids. Oil production increased as a result of the acquisition of Bridgetown Bridgetown, city (1990 pop. 5,928), capital, commercial center, and chief port of Barbados, West Indies. It is, in addition, a tourist and health resort. Sugar, rum, and molasses are the leading exports, and Bridgetown also serves as an important financial center and Energy Corporation in the third quarter of 2001. The decrease in natural gas production is due to normal declines. The decrease in gas production was mitigated mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. somewhat by the addition of Bridgetown's Atlee Buffalo shallow gas production. Oil and gas revenues were significantly affected by decreases in commodity prices. Prices over the first three months averaged $3.37 per thousand cubic feet for natural gas, $19.73 per barrel for natural gas liquids and $27.94 for oil. Last year's averages were $9.65, $39.72 and $42.41 respectively. Royalties for the three months ended March 31, decreased from approximately 21% of sales to approximately 15.8% for the equivalent period last year. These figures reflect the fact that a proportion of the quarter's production is from lower royalty shallow gas and the price sensitive nature of both Mineral Taxes and Crown Royalties. Operating costs operating costs npl → gastos mpl operacionales were relatively constant at $4.86 per barrel equivalent in 2002 ($6.77 - 10:1) versus $4.83 per barrel equivalent ($6.88 - 10:1) in 2001. The effect of a significant decrease in power cost was offset by increased per unit 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. particularly for shallow gas operations. 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. were $1.96 per barrel equivalent ($2.74 - 10:1) as opposed op·pose v. op·posed, op·pos·ing, op·pos·es v.tr. 1. To be in contention or conflict with: oppose the enemy force. 2. to $1.77 per barrel (2.52 - 10:1) for the same period in 2001. The increase reflects the addition of new staff members. Field net backs averaged $13.11 per barrel equivalent (18.26 - 10:1) to date in 2001, compared to $37.64 per barrel equivalent ($53.56 - 10:1) in 2001. This change is largely due to the change in commodity prices. COMMODITY PRICE RISK MANAGEMENT PROGRAM The nature of the Company's operations results in exposure to fluctuating fluc·tu·ate v. fluc·tu·at·ed, fluc·tu·at·ing, fluc·tu·ates v.intr. 1. To vary irregularly. See Synonyms at swing. 2. To rise and fall in or as if in waves; undulate. v. commodity prices. During 2002, the Company has entered into certain contracts to reduce its exposure to such risks. The Corporation entered into costless collar Collar 1. A protective options strategy that is implemented after a long position in a stock has experienced substantial gains. It is created by purchasing an out of the money put option while simultaneously writing an out of the money call option. 2. on 8,000 gigajoules per day of natural gas for the period from January January: see month. 1, 2002 to March 31, 2002. The strike price of the put option was $3.00 per gigajoule and the strike price of the call option was $4.60 per gigajoule based on the AECO AECO Aeromedical Evacuation Control Officer AECO Advance Engineering Change Order AECO Architecture, Engineering, Construction and Owner-operated C monthly index. The Corporation entered into costless collar on 8,000 gigajoules per day of natural gas for the period from April 1, 2002 to June 30, 2002. The strike price of the put option is $2.50 per gigajoule and the strike price of the call option is $3.55 per gigajoule based on the AECO C monthly index. The Company recognized a gain of $34,832 on the contract that ended on March 31, 2002. OUTLOOK The Company has established excellent land positions at Big Horn, Cadotte and Atlee Buffalo from which to grow its business in the long run. In the near term, development of the significant new pool discoveries at Atlee Buffalo will increase the Company's production levels by as much as 50% by the end of the second quarter. High impact drilling at Jumping Pound, Big Horn and Boltan may add significantly to production and reserves by year end. Management is of the view that commodity prices will remain extremely volatile for at least the next two quarters. Management is also of the view that natural gas prices will increase over the long term despite record or near record natural gas storage levels because of an improving economy and high production declines with no significant increases in new supply. All in all, the future looks very bright for Olympia. A balanced inventory of relatively low risk development opportunities coupled with some high risk high reward exploratory prospects promises to make the final quarters of this year both exciting and profitable for Olympia's shareholders. |
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