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ENCOR INC. ANNOUNCES RESULTS

 CALGARY, May 10 /PRNewswire/ -- Encor Inc. (Toronto: ECR) today announced its financial and operating results for the three months ended March 31, 1993. Funds generated from operations were $22.9 million or 14 cents per common share (nine cents per common share on a fully diluted basis), an improvement of $12.4 million or seven cents per common share (four cents per common share on a fully diluted basis) compared to the corresponding period in 1992. The increase was due primarily to lower production expenses and financial charges more than offsetting a decline in revenues and an increase in current income taxes.
 Revenues totalled $57.2 million, down $2.6 million or four percent compared to the same period last year. A drop in production volumes, attributable primarily to property dispositions completed in late 1992 and early 1993, caused revenue to decline by $14.1 million. However a significant strengthening of product prices, particularly natural gas prices which averaged $1.57 per thousand cubic feet in the first quarter of 1993 compared to $1.14 during the same period last year, together with lower royalties and other variances resulted in an offsetting increase in revenue of $11.5 million.
 Total oil and natural gas liquids production decreased by 29 percent to 22,549 barrels per day while natural gas production dropped by 10 percent to 193 million cubic feet per day for the three months ended March 31, 1993. These declines were due primarily to property dispositions completed in late 1992 and early 1993, offset in part by additional gas sales resulting from colder weather in early 1993 and improved access to export markets. The composition of production also changed as a result of the rationalization property swap which was completed with Amoco Canada Petroleum Limited and Maligne Resources Limited on March 1, 1992. The sale of Encor's producing interest in the Southeast Sumatra block in Indonesia in the first quarter of 1993 and the expected completion of the sale of its other producing interest in the Malacca Strait block in the second quarter, with an effective date of Jan. 1, 1993, has resulted in no international oil production during the quarter ended March 31, 1993, compared to 4,822 barrels per day during the same period in 1992.
 Cash expenses decreased by $13.4 million to $26.1 million for the quarter ended March 31, 1993. Production expenses decreased by 37 percent from $30.7 million for the quarter ended March 31, 1992 to $19.4 million for the current quarter. The decline is attributable mainly to property dispositions and reductions in costs resulting from the rationalization project. Exploration expenses declined by $1.5 million to $0.7 million for the period ended March 31, 1993 due to a reduction in the Company's exploration activities domestically and internationally while general and administrative expenses were down $0.6 million to $6.0 million. Included in general and administrative expenses for the current quarter are professional fees and other costs aggregating approximately $0.8 million incurred in respect of the proposed arrangement with Talisman Energy Inc. ("Talisman").
 Non-cash expenses decreased from $34.6 million in 1992 to $24.5 million for the current quarter due mainly to a reduction of $7.6 million in the provision for depletion, depreciation and amortization. This reduction resulted from the lower asset base and production levels subsequent to the property dispositions. Amortization of undeveloped rights declined from $2.8 million for the three months ended March 31, 1992 to $1.1 million for the current quarter reflecting a decrease in Canadian oil and gas leases subject to expiry in 1993.
 Financial charges declined by 32 percent to $7.7 million for the first three months of 1993 compared to $11.4 million for the quarter ended March 31, 1992. This reduction was due primarily to a lower average level of bank indebtedness outstanding during the first quarter of 1993 as proceeds from property dispositions and surplus cash flow were applied to reduce bank debt.
 The sale of Encor's interest in the Southeast Sumatra block in Indonesia largely accounted for a gain on sale of properties of $1.4 million recorded during the three month period ended March 31, 1993. An increase of $1.2 million in interest and other income to $1.7 million for the first quarter of 1993 resulted from interest earned on the proceeds from property dispositions prior to the application of the proceeds to reduce bank debt. A foreign exchange gain of $1.9 million recorded during the three month period ended March 31, 1993 reflects the impact of a strengthening Canadian dollar on the term bank loan, which is denominated in U.S. dollars, and on other foreign currency denominated liabilities.
 Income and other taxes for the first quarter of 1993 includes a provision for current income taxes in Canada of $3.5 million. In 1992, current income taxes of $0.8 million related to the Company's operations in Indonesia.
 The net loss applicable to common shareholders for the first quarter of 1993 was $4.2 million or three cents per common share compared to a net loss of $27.6 million or 18 cents per share for the corresponding period in 1992.
 The completion of the Company's Canadian property disposition program in the first quarter of 1993 and the application of sale proceeds and operating cash flow has reduced bank debt to $114.3 million at March 31, 1993 from $274.7 million at December 31, 1992. This has eliminated the borrowing base shortfall which previously existed under the terms of the Company's bank loan agreement. Encor's lenders have extended the waiver until at least May 31, 1993 in respect of a possible breach of the covenant to maintain shareholders' equity at or above $500.0 million pending the outcome of the Talisman proposal.
 On March 10, 1993 the Company received a proposal from Talisman to acquire all of the outstanding shares of Encor. As a result of subsequent negotiations with Talisman and BCE Inc., the proposal was amended on April 14, 1993. If the revised proposal is approved by Encor's shareholders, Encor common shareholders will receive one Talisman common share for every 45 Encor common shares held and BCE Inc. will receive 11,061,393 Talisman common shares for all of its outstanding Encor convertible preferred shares. BCE Inc. has executed a Letter of Understanding in which it has agreed to, among other things, support the proposed transaction.
 On March 11, 1993 the Board of Directors of Encor established a special committee of independent directors (the "Special Committee") to consider the Talisman proposal. The Special Committee, in turn, engaged independent financial advisors, Wood Gundy Inc., and legal counsel, Fasken Campbell Godfrey, to assist it in its deliberations.
 After considering the report of the Special Committee, the Board of Directors of Encor unanimously supported the revised proposal and recommended that shareholders vote in favor of the Arrangement at the Annual and Special Meeting to be held on May 20, 1993. An Information Circular concerning the proposed transaction was mailed to shareholders on or before April 22, 1993.
 The Special Committee has reviewed with Encor management the results for the first quarter of 1993, which include the results for the month of March which were not available when the Committee previously delivered its report and recommendations on the Talisman proposal to the Board of Directors. The Special Committee also requested that Wood Gundy review the first quarter results to determine whether its conclusion as to the fairness, from a financial point of view, to the Encor common shareholders would change. Wood Gundy determined that the first quarter results do not change its conclusion as to fairness. Based on its review and discussions with management and Wood Gundy, the Special Committee's recommendations with respect to the Arrangement remain unchanged.
 The Company continues to believe that the Talisman proposal represents the best alternative for maximizing economic returns to all stakeholders.
 The Company's shares trade on The Toronto Stock Exchange and the Montreal Exchange under the symbol "ECR".
 ENCOR INC.
 Financial Highlights
 (Millions of dollars, except per share amounts)
 Periods ended March 31 Quarter Ended
 1993 1992
 Revenues, net of royalties 57.2 59.8
 Funds generated from operations 22.9 10.5
 Per common share
 basic $0.14 $0.07
 fully diluted $0.09 $0.05
 Net loss 0.3 23.9
 Provision for redemption premium on
 convertible preferred shares 3.9 3.7
 Net loss applicable to common shareholders 4.2 27.6
 Per common share $0.03 $0.18
 Capital expenditures and exploration expenses 3.9 9.4
 Operations
 Average Daily Production
 Oil and natural gas liquids (Bbls) 22,549 31,586
 Natural gas (Mmcf) 193 215
 Average Prices
 Oil and natural gas liquids ($/Bbl) 19.42 17.32
 Natural gas ($/Mcf) 1.57 1.14
 -0- 5/10/93
 /CONTACT: E. Susan Evans, vice president-law and corporate affairs of Encor, Inc., 403-231-6066/


CO: Encor Inc. ST: Alberta IN: OIL SU: ERN

TM -- NY115 -- 6754 05/10/93 22:40 EDT
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