Part 1 of 2 - Norcen Energy - Record Earnings, Cash Flow and Capital Program Continue Growth Trend.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)--April 28, 1997--Norcen Energy (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). , ME: NCN NCN National Council of Nurses. ) Highlights:
-- First quarter records for both Earnings and Cash Flow
-- Earnings up 27 percent over first quarter last year to $36
million
-- Cash flow increased 13 percent to $142 million
-- Oil and gas capital expenditures increase 26 percent to $177
million as core area growth continues
-- Significant discoveries in the Gulf of Mexico and Venezuela
show development potential
-- Norcen signs farm-in on West Guarico property in Venezuela
-- Gulf of Mexico South Marsh Island acquisition completed and
sale of non-core New Zealand properties closed
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three months ended March 31 1997 1996 ------------------------------------------------------------- FINANCIAL (millions of dollars except per share amounts) Sales and Other Revenues $ 364 $ 379 Net Earnings $ 36 $ 28 Per common share basic and fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. $ 0.39 $ 0.34 Cash Flow $ 142 $ 126 Per common share basic $ 1.52 $ 1.52 fully diluted $ 1.52 $ 1.31 Capital Expenditures $ 178 $ 141 Long-Term Debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. (net of cash and accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. sales proceeds) $ 529 $ 566 Convertible Debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. $ 400 Common Shareholders' Equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. $ 1,518 $ 1,220 Common shares outstanding (000's) 93,394 83,029 OPERATING Production Oil (mb/d) 67.8 61.5 Natural gas liquids (mb/d) 6.2 6.5 Natural gas (mmcf/d) 503 498 Average Prices Received Oil (per bbl) $ 20.12 $ 18.55 Natural gas liquids (per bbl) $ 22.67 $ 19.40 Natural gas (per mcf) $ 2.31 $ 1.95 Wells Drilled Gross 146 155 Net 111 120 Success Ratio (percent) 80 76 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. Sales of Propane (millions of litres) 433 478 -------------------------------------------------------------
The first quarter of 1997 continued the strong performance of
1996 with growth in production, the capital program, cash flow from
operations and net earnings.
FINANCIAL:
Higher production volumes and continuing strong prices resulted
in net earnings for the quarter of $36 million, up from $28 million
for the same period last year. The increase in earnings was due to
higher earnings from oil and gas operations, offset slightly by
reduced earnings at Superior Propane related to the sale of the U.S.
operations in early 1996 and the sale of 50 percent of the Canadian
operations late 1996. Cash flow from oil and gas operations was up
22 percent from the same period last year due to higher production
and commodity prices combined with lower interest costs.
Prices for oil, liquids and gas continued to be strong in the
first quarter although Norcen's participation was moderated due to
fixed price commitments entered into under the commodity price risk
management program.
OPERATING:
Oil and liquids production for the first quarter was 74,000 b/d,
up from 68,000 b/d in the same quarter last year. Gas production was
also up from last year's first quarter, reaching 503 mmcf/d compared
to 498 mmcf/d. Production numbers were up primarily due to increased
oil production in Venezuela and heavy oil production in Western
Canada. There were some operational delays in the Gulf of Mexico and
Western Canada in the quarter which had a slight impact on
production, but these were resolved in April and will be reflected in
the remainder of the year. Oil and gas earnings for the quarter were
$29 million, a significant increase from $15 million for the same
period in 1996.
CAPITAL PROGRAM:
Capital expenditures in oil and gas increased to $177 million
from $138 million in the first quarter. Operated drilling activity
was similar to 1996 levels with 114 operated wells drilled, just
under last year's record-breaking pace of 118 wells in the first
quarter.
Reserve additions for the quarter were significantly higher than
last year at 13 mmbbls of oil and liquids and 118 bcf of gas. At the
same time, finding and development costs were kept at similar levels
to the first quarter last year, demonstrating continued efficiency
and comparable project quality.
Activity levels were high throughout the Western Canadian core
areas with particular emphasis in the "winter-access" regions. In
Jedney, 13 of 20 wells were cased and production to the new Caribou
Gas Plant is expected to begin in the second quarter. Heavy oil
exploration and development in Lindbergh and Provost continues at a
rapid pace. Thirty-two of 34 wells drilled were cased in the first
quarter in Lindbergh and six of eight in Provost. The expansion of
the Hays Gas Plant in the Taber region also got underway in the first
quarter and is expected to be operational in the third quarter.
A new discovery well at Eugene Island 107 in the Gulf of Mexico
encountered 166 feet of net gas pay in seven zones. Norcen also
acquired 14 blocks in the March land sale in the Gulf, 12 in the
shallow water near current operations and two deep water blocks --
Norcen's first. Work is continuing in evaluating the Shell farm-in
Betelguese project in the deep water and drilling is expected to
start later in the third quarter. There were some delays in
operations on the shelf in the first quarter as demand for workover
boats and equipment is high.
Venezuelan operations are on a consistent growth trend. An
exploration well in Oritupano-Leona was cased in the quarter with 235
feet of net pay. Active facility construction is also underway to
accommodate the growth in this region. Seismic shooting continues on
the Delta Centro block, slightly slower than anticipated, with
drilling of the first exploratory well expected in early 1998.
Also in Venezuela, Norcen signed an agreement to farm-in on the
West Guarico field. Similar in history and nature to
Oritupano-Leona, Guarico covers 850,000 acres and is currently
producing 300 b/d of light oil. Norcen will earn a 50 percent
interest and will operate the block once the deal closes in the
second quarter, following government approvals.
In total, there were net acquisitions in the quarter of $42.1
million highlighted by the acquisition of the Gulf of Mexico South
Marsh Island properties and the acquisition of the Hayter property in
Western Canada. Norcen also sold the non-core New Zealand properties
during the quarter for US$9.75 million.
CORPORATE:
A regular quarterly dividend of 15 cents per common share has
been declared payable on June 1, 1997 to holders of record on May 15,
1997.
If you would like to listen to a recording of Norcen's quarterly
investor analyst conference call, dial (416) 626-4100 and then push
529676. The line will be available for review from 1 p.m. on
Tuesday, April 29 to Friday, May 9.
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CAPITAL EXPENDITURES -------------------- (unaudited) (millions of dollars) three months ended March 31 1997 1996 ------------------------------------------------------------ Oil and Gas Land $ 12.0 $ 4.5 Seismic 22.1 13.8 Drilling 90.1 92.7 Facilities and other 53.2 26.7 ------------------------------------------------------------ $ 177.4 $ 137.7 Acquisitions (divestitures), net 42.1 (35.9) ------------------------------------------------------------- $ 219.5 $ 101.8 Propane Marketing 0.3 3.0 ------------------------------------------------------------ Total $ 219.8 $ 104.8 ------------------------------------------------------------ ------------------------------------------------------------ PRICE RISK MANAGEMENT - UPDATED POSITIONS ----------------------------------------- Canadian Gulf of Currency (x) Crude Oil Natural Gas Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. Gas Rate b/d b/d abbr. barrels per day mmcf/d mmcf/d 1997 19,500 US$17.44 192 CDN (Content Delivery Network) A system of distributed content on a large intranet or the public Internet in which copies of content are replicated and cached throughout the network. $1.75 81 US$1.94 156 1.3748 1998 21,000 US$18.60 59 CDN$2.54 17 US$2.12 216 1.3490 1999 58 CDN$2.63 84 1.3525 2000 58 CDN$2.73 (x) millions of U.S. dollars ADDITIONAL TABLES APPEAR IN PART 2 OF 2. CONTACT: Norcen Energy Resources Limited Grant Billing, 403/ 231-0104 403/231-0292 (FAX) or Norcen Energy Resources Limited Cheryl Cheryl is a female given name and can refer to: In crime:
403/ 231-0011 (FAX) cdick@norcen.com |
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