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DEKALB ENERGY REPORTS NINE-MONTH EARNINGS OF $9.2 MILLION GAS PRODUCTION CONTINUES AT HIGHER LEVELS

 CALGARY, Alberta, Nov. 11 /PRNewswire/ -- DEKALB Energy Company (NASDAQ-NMS: ENRGB) today reported nine-month net earnings of $9.2 million, or 95 cents per share, including a one-time tax benefit of $5.3 million, or 55 cents per share. The tax benefit was due to the adoption of Statement of Financial Accounting Standards (SFAS) 109 "Accounting for Income Taxes" as of Jan. 1, 1993. During the same nine- month period in 1992, DEKALB recorded a loss of $72.7 million, or $7.55 per share. The loss stemmed primarily from after-tax writedowns of $40.6 million on DEKALB's U.S. and Canadian properties in the first quarter and a $32.3 million after-tax charge related to the sale of the company's U.S. assets in the second quarter. For the three months ended Sept. 30, 1993, the company had net earnings of $1.1 million, or 11 cents per share, compared with a loss of $4.8 million, or 50 cents per share, in the same period last year.
 "Year to date, DEKALB's Canadian gas production is up 30 percent over last year to 54.4 million cubic feet per day (MMCFD)," said Vincent J. Tkachyk, president of DEKALB Energy. "Similarly, our average natural gas prices in Canada are up 30 percent compared with 1992. We continue to capitalize on these favorable industry conditions. During the third quarter, as scheduled, we tied in six wells that have added 4.5 MMCFD to our production volumes. In addition, completion of inlet compression in November at DEKALB's Leafland gas plant will accelerate gas production from the field by 2.5 MMCFD."
 NINE-MONTH RESULTS
 DEKALB reported nine-month operating revenues of $34.0 million, down 29 percent from $47.7 million in the prior year. The decline was due to the company's sale of substantially all of its U.S. assets, effective July 1, 1992.
 Year-to-date Canadian gas revenues rose to $20.5 million, up 60 percent from $12.8 million in the prior year. The average gas price was $1.37 per thousand cubic feet (MCF), a significant improvement from $1.05 per MCF last year. Canadian gas volumes increased 30 percent to 14.9 billion cubic feet (BCF), excluding the effects of a storage program that was discontinued in late 1992.
 Year-to-date cash flows from continuing operations before changes in assets and liabilities were $18.3 million, or $1.89 per share, down $5.5 million from last year. The decrease was due to the disposition of U.S. assets in 1992, despite improved cash flows from Canadian operations this year.
 THIRD-QUARTER RESULTS
 In the third quarter, the company reported operating revenues of $10.2 million, up 13 percent from $9.0 million in the comparable period last year. Results in 1992 include production from the company's California gas wells, which were sold to Samedan Oil Corporation for $5.1 million, effective July 1, 1993.
 In Canada, gas revenues for the quarter rose 73 percent to $6.4 million from $3.7 million. Gas volumes increased 40 percent to 4.9 BCF. The average Canadian gas price in the third quarter was $1.30 per MCF, up sharply from $1.06 per MCF last year. "Most of our increased production during the quarter was sold on the spot and term markets," Tkachyk said. "Prices for this non-system gas were very attractive, fully one-half above last year's levels."
 The company's average Canadian oil price during the third quarter declined to $14.90 per barrel from $19.20 per barrel last year. Canadian oil production rose slightly to 196,000 barrels from 190,000 barrels. However, oil and condensate revenue dropped 19 percent to $2.9 million.
 Tkachyk noted that DEKALB's lease operating expenses during the third quarter declined 20 percent to $3.08 on a barrel of oil equivalent (BOE) basis. "The improvement is due mainly to economies of scale from higher production and increased processing revenues," Tkachyk said. "In addition, we continue to keep our cost structure in line."
 OPERATIONS
 As scheduled, DEKALB began flowing natural gas to California on the Pacific Gas Transmission Company pipeline expansion, beginning Nov. 1, 1993. DEKALB has 12 million British Thermal Units per day (MMBTUD) of firm capacity on this expansion. "We now have an agreement based on market-sensitive pricing that covers the entire 12 MMBTUD," Tkachyk said.
 During the third quarter, DEKALB participated in a development gas well in the Bonanza area of northwestern Alberta. The well encountered 35 feet of net pay in the Lower Gething zone, flowing at over 4 MMCFD at approximately 1100 psi flowing tubing pressure. Subject to government royalties, DEKALB has a 50 percent working interest in the venture, which is operated by Rigel Oil and Gas Ltd.
 FINANCIAL POSITION
 At Sept. 30, 1993, long-term debt stood at $52.3 million, compared with $69.7 million at December 31, 1992. In the third quarter, the company repurchased $12.5 million of its public notes. DEKALB's total debt-to-total market capitalization ratio improved to 24 percent at September 30, 1993, compared with 39.9 percent at year end.
 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.
 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
 (Unaudited - in thousands, except per share amounts)
 Nine Months Ended Three Months Ended
 9/93 9/92 9/93 9/92
 Operating revenues 34,021 47,746 10,245 9,041
 Operating expenses 22,859 128,209 6,902 9,462
 Income (loss)
 from operations 11,162 (80,463) 3,343 (421)
 Interest expense, net 3,159 6,085 903 1,055
 Other expense
 (income), net 51 (2,092) 38 682
 Earnings (loss) before
 income taxes and cumulative
 effect of change in
 accounting principle 7,952 (84,456) 2,402 (2,158)
 Income tax
 provision (benefit) 4,129 (12,806) 1,328 1,620
 Earnings (loss) before
 cumulative effect of change in
 accounting principle 3,823 (71,650) 1,074 (3,778)
 Cumulative effect of change in
 accounting principle 5,334 0 0 0
 Earnings (loss) from
 continuing operations 9,157 (71,650) 1,074 (3,778)
 Loss from discontinued
 operations 0 (1,050) 0 (1,050)
 NET EARNINGS (LOSS) 9,157 (72,700) 1,074 (4,828)
 Earnings (loss) per share:
 Earnings (loss) before
 cumulative effect of change in
 accounting principle from
 continuing operations 0.40 (7.44) 0.11 (0.39)
 Earnings on cumulative
 effect of change in accounting
 principle from
 continuing operations 0.55 0.00 0.00 0.00
 (Loss) from discontinued
 operations 0.00 (0.11) 0.00 (0.11)
 NET EARNINGS
 (LOSS) PER SHARE 0.95 (7.55) 0.11 (0.50)
 Weighted average common
 shares outstanding 9,671 9,629 9,699 9,640
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (unaudited - in thousands)
 9/30/93 12/31/92
 Cash and cash equivalents 9,273 18,872
 Receivables 5,379 10,116
 Other current assets 814 989
 Property, plant and equipment, net 171,099 182,130
 Other non-current assets 6,722 6,878
 TOTAL ASSETS 193,287 218,985
 Current Liabilities 11,270 18,957
 Deferred credits, primarily income taxes 31,802 34,716
 Long-term debt 52,325 69,725
 TOTAL LIABILITIES 95,397 123,398
 Shareholders' equity 97,890 95,587
 TOTAL LIABILITIES
 AND SHAREHOLDERS' EQUITY 193,287 218,985
 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
 (unaudited - in thousands)
 Nine Months Ended
 9/93 9/92
 Net earnings (loss) from operations 9,157 (71,650)
 Adjustments to reconcile net earnings
 (loss) to net cash provided by
 operating activities:
 Depreciation, depletion
 and amortization 11,395 18,698
 Provision for the impairment
 of oil and gas properties 0 53,320
 Provision (benefit) for
 deferred income taxes 3,600 (10,358)
 Cumulative effect of change
 in accounting principle (5,334) 0
 (Gain) loss on disposal
 of U.S. assets (513) 34,942
 Other (35) (1,226)
 -- 18,270 23,726
 Changes in assets and liabilities (5,118) (872)
 Cash flows from continuing operations 13,152 22,854
 Cash flows from discontinued operations 840 479
 Net cash flows from
 operating activities 13,992 23,333
 Net cash flows from
 investing activities (5,870) (2,828)
 Net cash flows from
 financing activities (17,838) (21,605)
 Net effect of exchange rates on cash 117 (15)
 NET INCREASE (DECREASE)
 IN CASH AND CASH EQUIVALENTS (9,599) (1,115)
 SELECTED OPERATING STATISTICS
 Nine Months Ended Three Months Ended
 9/93 9/92 9/93 9/92
 Average Prices & Sales Volumes
 Oil and Condensate
 ($ per Bbl)
 Canada 16.56 18.07 14.90 19.20
 United States 14.22 16.94 14.22 0.00
 Total Company 16.54 17.49 14.88 19.20
 Natural gas
 ($ per MCF)
 Canada 1.37 1.05 1.30 1.06
 United States 1.81 1.57 1.02 1.97
 Total Company 1.40 1.23 1.30 1.16
 Oil, condensate and
 natural gas liquids
 (MBbls)
 Canada 730 730 252 232
 United States 5 766 5 0
 -- 735 1,496 257 232
 Natural gas (MMCF)
 Canada 14,863 12,191 4,898 3,503
 United States 858 6,234 8 427
 -- 15,721 18,425 4,906 3,930
 Oil, natural gas
 liquids and gas
 equivalents (MBbls)(a)
 Canada 3,207 2,762 1,068 815
 United States 148 1,805 6 71
 -- 3,355 4,567 1,074 886
 (a) Gas converted to oil at 6,000 cubic feet per barrel
 -0- 11/11/93
 /CONTACT: Mark Merstorf, investor relations, of DEKALB, 403-261-1286/
 (ENRGB)


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

CP-DB -- MN003 -- 3065 11/11/93 08:27 EST
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