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GULF CANADA RESOURCES LTD. REPORTS 1991 SUMMARY

 GULF CANADA RESOURCES LTD. REPORTS 1991 SUMMARY
 CALGARY, Alberta, Feb. 20 /PRNewswire/ -- Gulf Canada Resources


Ltd. (AMEX: GOU) made significant strides in the fourth quarter to position itself among the top quartile of North American oil and gas companies, Chuck Shultz, president and chief executive officer, said today in announcing the company's 1991 financial and operating results.
 "The implementation of newly developed strategies to improve cash flow and restructure our asset base combined with the reduction of financing levels by $452 million is beginning to have a positive impact on corporate performance," Shultz noted.
 Shultz noted the many high points in 1991, particularly the fourth quarter achievements:
 -- increased production of Western Canada conventional crude oil;
 -- the sale of non-core assets;
 -- further application of sale proceeds to reduce financing levels;
 and,
 -- the first production from the Russian joint venture.
 "In addition, the recently announced decision to withdraw from Hibernia means we can now focus on developing near-term opportunities in our core areas," Shultz added.
 The company announced a loss from continuing operations of $27.0 million, or $0.61 per ordinary share for the year ended Dec. 31, 1991. The loss includes a $90 million after-tax ($160 million pre-tax) provision associated with the withdrawal from Hibernia, and a $60 million after-tax gain on the sale of the company's working interest in the Caroline gas field.
 In 1990, the company reported a loss of $15 million, or $0.77 per ordinary share, which included an after-tax, non-cash charge of $40 million related to previously incurred frontier exploration costs.
 HIGHLIGHTS
 Western Canada
 During the fourth quarter, conventional gross crude oil production increased to 43,800 barrels per day compared to 42,000 barrels per day in the first nine months. The turnaround marks the first quarterly increase in more than three years, and Gulf expects to maintain this momentum in 1992.
 Of the last 25 wells drilled during the fourth quarter, 24 were producers, including Sylvan Lake, Alberta, where seven of eight development wells drilled were producers.
 Three horizontal wells completed in Saskatchewan in the fourth quarter added approximately 1,000 barrels per day of oil to production. This and other accomplishments increased the company's Saskatchewan production by more than 50 percent to 5,500 barrels per day at year end. Gulf will substantially increase its horizontal drilling activity in Western Canada in 1992.
 As noted above, in 1991 the company continued its success at Sylvan Lake, where a total of 17 wells drilled resulted in 12 oil and two gas wells, which will add an estimated 1,400 barrels per day of oil and 15 million cubic feet per day of natural gas to net production when connected in 1992.
 International
 The fourth quarter culminated in the start of several international projects which will result in $125 million of third-party investment and significantly expand Gulf's participation in large international projects with minimal cost to the company.
 In December, the Russian government approved the company's 25 percent-owned KomiArcticOil joint venture in the Komi Republic. In January 1992, 300,000 barrels of crude oil, comprising the first two months of KomiArcticOil production, were exported and sold on the international market.
 At year end, exploratory drilling was under way on the company's Block A property in Indonesia. Japan Petroleum Exploration Co. Ltd. is paying the full costs of exploration and development, up to the first U.S. $70 million, in return for a 50 percent interest. The farmout accelerates exploration while minimizing Gulf's cost and risk.
 Gulf's 1991 capital expenditures in Indonesia were directed to South Sumatra, where discoveries at Dayung and Sambar, in which Gulf has a 56 percent interest, confirmed the presence of large natural gas reserves on the Corridor Block.
 Financial Results
 In the fourth quarter, Gulf received $182 million from the sale of various non-strategic assets, including its working interest in the Hanlan-Robb area properties. The company significantly improved its financial position by applying the proceeds totalling $614 million from these and other asset sales earlier in the year to reduce net financing by $452 million.
 Net Financing Change
 (Millions of dollars)
 Dec. 31, Increase
 1991 1990 (decrease)
 Preference shares 577 1,004 (427)
 Debt 1,776 943 833
 Total 2,353 1,947 406
 Less cash on hand 858 nil 858
 Net financing 1,495 1,947 (452)
 Cash generated from continuing operations was $328 million in 1991, before the $80 million to be incurred for the Hibernia withdrawal, compared with $389 million in 1990.
 Depressed oil prices and the lowest natural gas prices in a decade resulted in reduced production revenues.
 The board of directors declared quarterly dividends totalling $0.40 per ordinary share in 1991. Since the May 1991 introduction of the dividend reivestment program, approximately 75 percent of ordinary share dividends were reinvested in ordinary shares. This represents an annualized cash saving of approximately $46 million.
 Capital expenditures and exploration expenses were $313 million, down from $356 million in 1990. The decrease primarily reflects reduced exploration activity in Western Canada, partially offset by expenditures related to Hibernia construction.
 Gross sales of liquids were 88,900 barrels per day in 1991, compared with 93,000 barrels per day in 1990. Increased sales of synthetic crude oil were offset by declines in conventional crude oil caused primarily by the absence in 1991 of heavy oil production from Saskatchewan properties which were sold in mid-1990.
 Gross natural gas sales were 313 million cubic feet per day in 1991, compared with 336 million cubic feet per day in 1990. The decline was because of reduced demand as a result of warm weather in early 1991, reduced purchases of Canadian gas by California buyers, and the sale of the company's Hanlan-Robb area properties effective Nov. 1.
 "In 1991, we achieved milestones in reducing net financing, living within cash flow, and pursuing opportunities in our core areas," concluded Shultz. "The fourth quarter was particularly encouraging, and we expect to maintain this positive momentum in 1992."
 Consolidated Statements of Loss
 (Millions of dollars except per share amounts)
 Year ended Dec. 31,
 1991 1990
 Revenues
 Net oil and gas $786 $872
 Net gain (loss) on asset disposals 133 (9)
 Other 60 67
 Total 979 930
 Expenses
 Operating -- production 314 308
 -- contract drilling 69 102
 Exploration 79 183
 General and administrative 94 73
 Depreciation, depletion
 and amortization 215 222
 Hibernia withdrawal costs 160 0
 Finance charges, net 38 42
 Income tax expense 37 15
 Total 1,006 945
 Loss from continuing operations (27) (15)
 Discontinued operations (36) (8)
 Loss for the year ($63) ($23)
 Per ordinary share (Note 1)
 Loss from continuing operations ($0.61) ($0.77)
 Loss ($0.84) ($0.82)
 Condensed Consolidated Statements
 of Cash Flows
 Operating activities
 Cash generated from
 continuing operations before
 Hibernia withdrawal costs $328 $389
 Hibernia withdrawal costs
 to be incurred (80) 0
 Other, net 9 37
 Total 257 426
 Divesting (investing) activities,
 net 314 (754)
 Dividends (108) (168)
 Financing activities 395 486
 Increase (decrease) in cash 858 (10)
 Cash at beginning of period 0 10
 Cash at end of period (a) $858 $0
 (a) Comprises cash and short-term investments
 Consolidated Statements of Financial Position
 (Millions of dollars)
 Dec. 31,
 1991 1990
 Assets
 Current $1,070 $320
 Investments and other assets 372 709
 Property, plant and equipment 2,484 2,738
 Total $3,926 $3,767
 Liabilities and shareholders' equity
 Current $646 $407
 Long-term debt 1,478 902
 Other long-term liabilities 68 123
 Deferred income taxes 210 211
 2,402 1,643
 Shareholders' equity
 Share capital
 Senior preference shares 577 1,004
 Ordinary shares 1,492 1,468
 Deficit (520) (326)
 Foreign currency translation
 adjustment (25) (22)
 Subtotal 1,524 2,124
 Total $ 3,926 $ 3,767
 Note to Consolidated Financial Statements
 1) The loss per ordinary share was calculated after deduction of cumulative preference share dividends of $68 million, $105 million and $100 million for 1991, 1990 and 1989 respectively. The weighted average number of ordinary shares outstanding was 156,884,524 for 1991 and 155,876,091 for 1990 and 1989.
 Supplementary Information
 Year ended Dec. 31,
 1991 1990
 gross/net
 Volumes sold
 Crude oil and natural gas liquids
 (thousands of barrels per day)
 Crude oil
 -- Canada -- conventional 42.2/ 34.6 46.9/ 39.3
 -- synthetic 14.9/ 14.9 13.8/ 13.8
 -- Indonesia 16.8/ 11.0 17.3/ 11.1
 Natural gas liquids 15.0/ 12.8 15.0/ 12.4
 Total 88.9/ 73.3 93.0/ 76.6
 Natural gas
 (millions of cubic feet per day) 312.5/265.6 335.9/279.4
 Sulphur (thousands of tons) 326/304 354/341
 Gross average prices
 Crude oil ($ per barrel)
 -- Canada -- conventional $25.39 $25.08
 -- synthetic 23.14 27.40
 -- Indonesia 22.61 26.24
 Natural gas liquids ($ per barrel) 16.60 21.20
 Average liquids price ($ per barrel) 23.00 25.01
 Natural gas ($ per thousand cubic feet) 1.47 1.55
 Sulphur ($ per ton) 54.47 57.95
 Average exchange rate
 (Cdn$1) U.S.$0.87 U.S.$0.86
 -0- 02/20/92
 /CONTACT: Craig Langpap (investors), 403-233-4341, or John Sparks, 403-233-4049, both of Gulf Canada Resources Ltd./
 (GOU) CO: Gulf Canada Resources Ltd. ST: Alberta IN: OIL SU: ERN


DM-JL -- LA047 -- 1213 02/20/92 22:50 EST
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