ENCOR INC. ANNOUNCES FINANCIAL AND OPERATING RESULTS
ENCOR INC. ANNOUNCES FINANCIAL AND OPERATING RESULTS CALGARY, Alberta, Aug. 5 /PRNewswire/ -- Encor Inc.
(Toronto, Montreal, Calgary: ECR) today announced its financial and operating results for the quarter and six month periods ended June 30, 1992. Funds generated from operations for the second quarter were $14.5 million or 9 cents per common share (6 cents per share on a fully diluted basis), an increase of $3.5 million or 2 cents per common share (1 cent per share on a fully diluted basis) from the second quarter of 1991. For the six-month period ended June 30, 1992 funds generated from operations amounted to $25.0 million or 16 cents per common share (11 cents per share on a fully diluted basis) compared to $31.6 million or 20 cents (13 cents fully diluted) for the corresponding period in 1991. The net loss applicable to common shares for the six-month period amounted to $40.8 million or 26 cents per share compared to a net loss of $45.4 million or 29 cents per share for the same period in 1991.
Revenues, net of royalties, for the six months of 1992 were $125.1 million, a reduction of $11.2 million or 8 percent from the same period last year. Increased revenues of $13.0 million attributable to higher natural gas volumes were more than offset by declines of $10.5 million due to the impact of lower natural gas prices, $9.4 million arising from a reduction in hedging revenue and $5.2 million resulting from a decline in oil and natural gas liquids volumes. A reduction in royalties of $1.2 million and other price and volume variances partially offset these declines. Expenses rose by $10.2 million from $139.2 million for the first six months of 1991 to $149.4 million for the first six months of 1992. The provision for depletion, depreciation and amortization increased by $15.1 million due to an increase in natural gas production, an increase in the depletion and depreciation rate following a downward revision to the company's proved natural gas reserves in the fourth quarter of 1991, and an additional provision for future removal and site restoration costs of $3.4 million. General and administrative expenses were $2.1 million higher due mainly to increased office and equipment leasing expenses and fees and other costs relating to pursuing strategies to address the company's financial difficulties. Expenses for the quarter ended June 30, 1992 include approximately $2.0 million in severance and early retirement costs resulting from staff reductions implemented during the quarter. A comparable cost was incurred in the second quarter of 1991 in connection with a staff reduction program completed at that time. These increases were partially offset by lower exploration expenses of $2.7 million as a result of reduced activity and lower dry hole and abandonment costs of $3.5 million. Amortization of undeveloped rights was also down by $3.5 million reflecting fewer oil and gas leases subject to expiry in 1992. Financial charges of $22.3 million declined by $6.9 million or 24 percent for the six months ended June 30, 1992, compared to the corresponding period in 1991, as a result of lower average interest rates. The second quarter disposition of Encor's interest in the Kupe and Toru fields off the west coast of New Zealand for proceeds of $20.8 million accounted for substantially all of the gain on sale of properties of $20.1 million recorded during the six months ended June 30, 1992. Capital expenditures and exploration expenses for the first six months of 1992 were cut substantially to $17.4 million, a reduction of 62 percent from the $45.2 million spent during the same period in 1991. In western Canada, spending amounted to $13.7 million, down $22.4 million from 1991 levels. Internationally, capital expenditures and exploration expenses declined from $9.1 million in 1991 to $3.7 million during the six months ended June 30, 1992. In the continuing efforts to find a permanent solution to the financial issues facing Encor, the company has been pursuing two alternate courses of action: a sale of the company and a restructuring of Encor's capital structure. While these two alternatives remain as possible options, the company will also pursue asset dispositions to address the borrowing base deficiency under its loan agreements. To this end, Encor has engaged Waterous Securities Inc. to assist in the sale of selected western Canadian properties. At the same time, the company will continue to work with its lenders to restructure the production loan facility and deal with the equity convenant. The company's shares trade on The Toronto Stock Exchange and the Montreal Exchange under the symbol "ECR." ENCOR INC. Financial Highlights Quarter Ended Six Months Ended June 30, June 30, 1992 1991 1992 1991 Financial (millions of dollars, except per share amounts) Revenues, net of royalties 63.5 62.4 125.1 136.3 Funds generated from operations 14.5 11.0 25.0 31.6 Per common share Basic $0.09 $0.07 $0.16 $0.20 Fully diluted $0.06 $0.05 $0.11 $0.13 Net loss 9.5 21.0 33.4 38.4 Provision for redemption premium on convertible preferred shares 3.7 3.5 7.4 7.0 Net loss applicable to common shareholders 13.2 24.5 40.8 45.4 Per common share $0.08 $0.15 $0.26 $0.29 Capital expenditures and exploration expenses 8.0 21.3 17.4 45.2 Operations Average Daily Production Oil and natural gas liquids (Bbls) 30,350 32,901 30,967 33,925 Natural gas (MMcf) 214 148 215 165 Average Prices Oil and natural gas liquids ($/Bbl) 20.38 17.36 18.80 18.54 Natural gas ($/Mcf) 1.16 1.35 1.15 1.42 -0- 8/5/92 /CONTACT: E. Susan Evans, VP-law and corporate affairs of Encor, 403-231-6066/ (ECR.) CO: Encor Inc. ST: Alberta IN: OIL SU: ERN
KJ -- LA037 -- 7342 08/05/92 19:00 EDT
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|Date:||Aug 5, 1992|
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