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Arkla Exploration.

ARKLA EXPLORATION

Announces Year End Results

SHREVEPORT, LA, Dec. 31, 1990. -- Operating revenues in 1990 increased to $160.1 million, an 11 percent increase from operating revenues of $143.9 million in 1989. A significant portion of the increase was attributable to higher gas and oil production for the year. Produced gas sales volume rose 5 Bcf to 58.2 Bcf. This represents a 9 percent increase over the 1989 level of production. This increased gas production was primarily a result of the successful completion of the infill drilling program which commenced during 1989 in Carthage and Waskom Field Fields, Texas. The oil and condensate volume for 1990 also increased significantly. Liquid sales volume increased to 709 MBbl in 1990 from 543 MBbl in 1989. This 31 percent increase was primarily due to the company's continued development of the MissLa area and the Carthage infill drilling program. The crisis in the Middle East was largely responsible for the increase in the average price per barrel of liquids to $22.51 in 1990 from $18.35 in 1989. The volume of gas purchased for resale increased 2 Bcf in 1990 to 23.6 Bcf. This increase in volume was offset by a 19 cent per Mcf decrease in sales price.

Total operating expenses were $136.3 million in 1990, an increase of $20.4 million over 1989, of which $12.8 million was attributed to increased depletion and depreciation expense. The increase in depletion and depreciation was a result of: (1) an increase in the depletion rate of approximately 10 cents per Mcf; (2) a 6 Bcf increase in total equivalent volumes produced; and (3) increased depreciation on other assets. In addition, the cost of natural gas purchased increased due to a 9 percent (2 Bcf) increase in the volume of gas purchased and a 5 percent (8 cents per Mcf) increase in the average price of purchased gas. Taxes other than income taxes increased 33 percent to $7.4 million in 1990 from $5.6 million in 1989 due primarily to increased production as discussed above.

The company qualifies for a federal tax credit of approximately 58 cents per Mcf for certain gas produced from the Cotton Valley formation in the Carthage and Waskom Fields. The available credit from production totaled approximately $3.5 million for 1990 and approximately $1.1 million for 1989. Since the company files a consolidated tax return with Arkla, these credits could not be utilized due to Arkla's consolidated tax loss for those years. However, the company did identify and claim additional credits for other taxable years of approximately $1.4 million in 1990 and approximately $1.5 million in 1989. In future years, the company anticipates being able to utilize tight sands tax credits as they are generated.

Contact: Carl S. Quinn, Chairman of the Board and Chief Executive Officer, Arkla Exploration Company, P.O. Box 21734, Shreveport, La. 71151. (318) 429-2841.
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Title Annotation:Public Company Corporate Reports
Publication:Arkansas Business
Date:May 6, 1991
Words:488
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