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GULF CANADA RESOURCES LIMITED DIVESTMENT PROCEEDS EXCEED TARGET

 CALGARY, Alberta, Oct. 27 /PRNewswire/ -- Gulf Canada Resources Limited (AMEX: GOU) has taken a key step in improving its financial position with the completion of its previously announced asset sale program ahead of schedule, the company announced today. Select non- producing and Western Canada producing assets were sold for $443 million, exceeding the $400 million target set in March.
 The assets sold represented approximately 9,700 barrels per day of liquids production and 25 million cubic feet per day of natural gas. The company noted that due to their timing, the assets sales will have only a modest impact on 1993 volumes, and that increased investment in Western Canada should result in production and reserve additions offsetting the impact by the end of 1994.
 Proceeds from the asset sales and the receipt in April of income tax refunds and related interest contributed to a reduction in Gulf's debt, net of cash balances, to $969 million as of Sept. 30, 1993. The company repaid $129 million of debt and increased cash balances by $302 million to nearly $700 million.
 Gulf reported third quarter earnings from continuing operations of $17 million, compared with $18 million for the same period in 1992. Gulf also reported a loss of $24 million for the first nine months compared with a break-even position in 1992, as the net gain on asset sales was more than offset by lower cash generation and a number of higher non-cash charges. Cash generated from continuing operations for the first nine months was $195 million, down from $267 million last year, largely due to the inclusion of $60 million in tax refunds and related interest in 1992.
 Third quarter liquids production averaged 96,300 barrels per day, essentially unchanged from 1992. Nine-month production of 94,400 barrels per day was down slightly from 95,600 barrels per day in 1992 primarily due to problems at a partner-operated facility in the first quarter.
 Gulf is aggressively pursuing its natural gas opportunities and adding both production and reserves in Western Canada. Third quarter natural gas production averaged 293 million cubic feet per day, down from 307 million cubic feet per day a year earlier. Similarly, nine- month production of 303 million cubic feet per day was down from 322 million cubic feet per day in 1992, reflecting the impact of asset trades made since the end of the third quarter of 1992.
 Gulf also announced two developments in its Indonesia operations. The company completed the final well in a partner-funded exploration program on Block A in South Sumatra. Alur Rambong tested natural gas at 28 million cubic feet per day and condensate at up to 1,000 barrels per day. Further evaluation and possible delineation drilling will be required to fully assess the structure. The company also announced that the government of Indonesia had approved in principle the plan of development for its natural gas project in the Corridor Block in South Sumatra. Drilling continues to confirm reserves for the project.
 GULF CANADA RESOURCES LIMITED
 (Consolidated, unaudited;
 millions of dollars, except per-share amounts)
 Period ended Sept. 30: 1993 1992 1993 1992
 Revenues
 Net oil and gas $172 $180 $523 $517
 Net gain (loss) on
 asset disposals 31 0 65 (6)
 Other incl. contract drilling 17 41 40 74
 Total: 220 221 628 585
 Expenses
 Operating
 - production 79 82 238 240
 - contract drilling 2 16 7 44
 Exploration 7 9 28 34
 General and administrative 15 13 46 46
 Depreciation, depletion and
 amortization 56 55 175 155
 Reduction in carrying value
 of assets and other (A) 32 36 65 36
 Finance charges, net 32 (20) 88 10
 Inc. tax expense (recovery) (20) 12 5 20
 Total: 203 203 652 585
 Earnings (loss) from
 continuing operations 17 18 (24) 0
 Discontinued operations 0 0 0 ( 25)
 Earns.(loss) for the period $17 $18 $(24) $(25)
 Per ordinary share (B)
 Earnings (loss) from
 continuing operations .07 .03 (.28) (.22)
 Earnings (loss) .07 .03 (.28) (.38)
 CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)
 OPERATING ACTIVITIES
 Earnings (loss) from
 continuing operations $17 $18 $(24) $0
 Non-cash items included
 in earnings (loss):
 Deprec., depletion & amort. 56 55 175 155
 Net (gain) loss on
 asset disposals (31) 0 (65) 6
 Reduction in carrying
 value of assets & other 32 36 65 36
 Exploration expense 7 9 28 34
 Deferred income taxes (28) 22 (12) 22
 Other 11 6 28 14
 Cash generated from
 continuing operations 64 146 195 267
 Changes in non-cash working
 capital, and other 1 ( 91) 52 (133)
 Total: 65 55 247 134
 INVESTING ACTIVITIES
 Net proceeds (costs)
 on asset sales 193 (2) 431 1
 Acq. of net assets of Beaufinco
 Equipment Holdings Ltd. 0 54 0 54
 Capital expenditures and
 exploration expenses (59) (62) (158) (191)
 Changes in non-cash working
 capital, and other (10) (5) (77) (20)
 Total: 124 (15) 196 (156)
 DIVIDENDS 0 (11) (13) (41)
 FINANCING ACTIVITIES
 Reductions in long-term debt (8) (202) (35) (227)
 Reductions in short-term loans 0 (80) (94) (85)
 Issue of equity, net 0 0 1 0
 (8) (282) (128) (312)
 Incr.(decr.) in cash 181 (253) 302 (375)
 Cash at beginning of pd. 517 736 396 858
 Cash at end of period(a) $ 698 $ 483 $ 698 $ 483
 (a) Comprises cash and short-term investments
 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 (Unaudited; millions of dollars)
 ASSETS 9/30/93 12/31/92
 Current
 Cash and short-term investments $698 $396
 Accounts and other receivables 180 183
 Other 63 77
 Total: 941 656
 Investments, deferred charges
 and other assets 242 368
 Property, plant and equipment 2,098 2,360
 Total: $3,281 $3,384
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current
 Short-term loans $ 0 $ 94
 Accounts payable 109 143
 Current portion of long-term debt 55 53
 Current portion of other long-term liab. 28 29
 Other 75 63
 Total: 267 382
 Long-term debt 1,612 1,570
 Other long-term liabilities 109 84
 Deferred income taxes 106 138
 Total: 2,094 2,174
 Shareholders' equity
 Share capital
 Senior preference shares 577 577
 Ordinary shares 1,517 1,516
 Deficit (924) (886)
 Foreign currency translation adjustment 17 3
 Subtotal: 1,187 1,210
 Total: $3,281 $3,384
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (A) In 1993, Gulf recorded a $33 million reduction in the carrying value of Gulf's investment in Home Oil Company Limited, which was subsequently sold for proceeds of $145 million, and a $32 million provision relating to an oil indexed financial instrument entered into in 1987. In 1992, Gulf recorded a $36 million provision relating to the company's withdrawal from Hibernia.
 (B) Loss per ordinary share is calculated after deduction of cumulative preference share dividend requirements, including those in arrears, of $7 million and $12 million for the three-month periods ended Sept. 30, 1993 and 1992, respectively, and $23 million and $36 million for the nine-month periods ended Sept. 30, 1993 and 1992, respectively.
 (C) In connection with the suspension of the preference share dividends in March 1993, accrued losses on related swap contracts of approximately $13 million ($7 million after tax) were recorded as a current liability and charged to the deficit.
 (D) Certain amounts for the three and nine months ended Sept. 30, 1992, have been reclassified to conform with the presentation adopted for 1993.
 SUPPLEMENTARY INFORMATION (UNAUDITED)
 Period ended Sept. 30: Three months Nine months
 1993 1992 1993 1992
 VOLUMES
 (produced/sold)(Note)
 Crude oil and natural gas liquids
 (thousands of barrels per day)
 Canada
 Conventional crude oil 42/40 44/45 43/44 44/45
 Synthetic crude oil 17/17 15/15 16/16 15/15
 Natural gas liquids 20/14 20/15 17/13 19/15
 Total: 79/71 79/75 76/73 78/75
 International
 Indonesia 14/14 14/14 15/15 15/15
 Russia 3/ 6 3/ 2 3/ 4 2/ 1
 Total: 17/20 17/16 18/19 17/16
 Total liquids 96/91 96/91 94/92 95/91
 Natural gas (millions of cubic feet per day)
 293/268 307/265 303/277 322/295
 Note: excludes injection requirements and includes inventory
 changes.
 GROSS AVERAGE PRICES
 Crude oil and natural gas liquids (dollars per barrel)
 Canada
 Conventional crude oil $21.33 $22.55 $21.40 $21.51
 Synthetic crude oil 20.82 24.42 21.75 22.41
 Natural gas liquids 13.86 15.21 16.35 15.28
 International
 Indonesia 22.37 24.10 22.76 22.36
 Russia 16.01 19.37 16.68 18.81
 Average 19.97 21.81 20.72 20.75
 Natural gas
 (dollars per thousand
 cubic feet) 1.52 1.36 1.57 1.34
 AVERAGE EXCHANGE RATES US$0.77 US$0.83 US$0.78 US$0.84
 (Cdn$1)
 -0- 10/27/93
 /CONTACT: Gary Sherkey, 403-233-4341, or John Sparks, 403-233-4049/
 (GOU)


CO: Gulf Canada Resources Limited ST: Alberta IN: OIL SU: ERN

JS -- NY101 -- 7478 10/27/93 16:09 EDT
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Date:Oct 27, 1993
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