Onthego
18 years ago
19:09 EST Monday, November 14, 2005
CALGARY, ALBERTA--(CCNMatthews - Nov. 14, 2005) - Oilexco Incorporated ("Oilexco") (TSX:OIL) (AIM:OIL) announces its Financial Results for the 3rd Quarter, and for the 9 month period ending September 30, 2005.
Oilexco's principal focus continues to be development of its 100% owned "Brenda" Field and the concurrent development of its 70% owned Nicol Field. The initial draft Brenda Field Development Plan and Environmental Assessment was filed with the UK Department of Trade and Industry ("DTI") by the Company in April. The review process has been ongoing, with the final Field Development Plan ("FDP") filed in late September. Final DTI approval of the Brenda FDP was received on November 10th. Issues related to new UK Government policies on future decommissioning, as well as gas flaring, delayed the Plan's submission and approval. Subsequent to the end of the period, the Company presented a draft Field Development Plan for the Nicol Field to its partners and to the DTI. The final Nicol Field Development Plan is expected to be submitted to the DTI late in the fourth quarter.
In July Oilexco signed a "Heads of Agreement" with CNR International (UK) Ltd, a subsidiary of Calgary-based Canadian Natural Resources Limited, relating to the construction and tie-in of the "Brenda" Field to the Balmoral Floating Production Facility and to the provision of production and operating services to the Brenda Field. In addition to the Agreement with CNR International, the Company also signed several contracts with leading sub-sea contractors for the provision of services and sub-sea production equipment for the Brenda development. Technip Offshore (UK) Limited has been contracted as the primary contractor for sub-sea installation and pipe lay and for the provision of line pipe and risers that will connect Brenda to the Balmoral Platform. Meanwhile, Dunfermline, Scotland-based FMC Technologies Ltd has been contracted to provide four sub-sea Xmas trees for the development. Fabrication is well underway, with delivery of the sub-sea trees scheduled throughout February 2006. Oilexco has also contracted the Norwegian company FRAMO Engineering AS for the supply of a MultiManifold, which consists of a Multiphase Subsea Pump, a Multiphase a Flow Meter, Multiport Selector Manifold, a Control System, and a Skid. FRAMO will also supply the 8.5 km umbilical to the Balmoral Facility as well as topside Power and Control Modules. The FRAMO MultiManifold will be the integral component of Oilexco's subsea infrastructure hub at Brenda, facilitating additional commercial development in the area. The manifold has been designed to accommodate up to eight wells or flow lines, with a design flow capacity through the Multiphase Pump of 51,000 bbls of fluid per day. This capacity will allow for the tie-in of additional oil prospects in the region. The Company's contracted drilling rig, the Transocean semi-submersible Sedco 712, is expected to move to the Brenda field area in early February of 2006 to begin drilling of the Brenda horizontal production wells. The target for the first oil production from Brenda continues to be late in the third quarter to early in the fourth quarter of 2006. The drilling and completion program for the production wells at Brenda is expected to take five months to complete.
In May, Oilexco announced the successful appraisal of a new oil accumulation called Nicol, located 10 km northwest of the Brenda Field. Oilexco has proposed to its partners that one to two horizontal production well(s) be used to develop the "Nicol" oil accumulation. Also, Oilexco has proposed that these production well(s) be tied back to the Brenda production manifold, which will be located approximately 10 km to the southeast, and that development at Nicol proceed concurrently with the development at Brenda. Drilling and completion of the production well(s) will be consecutive to the Brenda production wells, with oil production targeted for late in the third quarter to early in the fourth quarter of 2006. Oil production at Nicol will flow through a 10 km subsea tie-back to the Brenda FRAMO MultiManifold. Oilexco's primary contactors for Brenda (Technip, FRAMO and FMC) will also provide services and sub-sea equipment for the Nicol development.
During the third quarter, the Company also worked actively toward finalising its 2005/2006 UK North Sea drilling program. Oilexco's activities are focused in the central UK North Sea, the location of its Brenda and Nicol oil accumulations. In the second and third quarters, the Company entered into five farm-in agreements/joint venture agreements or letters of intent for drilling ventures with third parties targeting oil and/or gas condensate prospects in the central UK North Sea. Drilling operations on these projects commenced in July at Yeoman, with well 15/18b-11, followed by the well 15/22-18 at Black Horse, which commenced drilling operations on August 5th. Wells at Muness (Block 21/4b) targeting gas condensate, Palomino (Block 21/6a) targeting oil, and Tay (Block 21/23a) targeting oil, will be drilled consecutively after operations are concluded at Black Horse in mid November. If drilling operations on these projects are extended due to weather or other delays, the drilling of the well at Tay (Block 21/23a) will be deferred until after the drilling of the production wells at Brenda and Nicol, which are due to commence operations in early February.
On September 6th Oilexco North Sea Limited was awarded two Blocks in the UK 23rd Offshore Oil and Gas Licensing Round. The first award, Block 22/2b, was awarded to Oilexco at 100% interest. It is located 35 km southeast of Oilexco's Brenda development. The Company has identified two prospects on the Block, which includes a Paleocene oil prospect analogous to Brenda. This prospect is well defined, with 3D seismic and an oil show of 2,416 bbl/d from well 22/2-2, which was drilled by another operator in 1984. This prospect will be drilled in the late third quarter to early fourth quarter of 2006 to fulfil the firm well commitment to the DTI made by Oilexco in its successful bid. In addition to the Paleocene "Brenda look-alike" oil prospect, Oilexco has also identified a deep multi-zone gas-condensate prospect on the Block. This prospect is a large structural closure prospective for gas-condensate in Lower Cretaceous sands, as well as in Jurassic sands in High Pressure and High Temperature conditions (HPHT). Given the nature of this structure, accompanied with the HPHT conditions, Oilexco's offer of a contingent well commitment to evaluate this prospect was accepted by the DTI. This drilling commitment is contingent on Oilexco completing additional seismic work to further evaluate the prospectivity of the structure. The Company is at least two years away from drilling this deep prospect.
Oilexco was also awarded 50% of Block 15/26b in the 23rd Round, along with an equal interest to Nexen. This Block is located 30 km southwest of Oilexco's Black Horse project in which it is also partnered with Nexen. A firm well commitment was accepted by the DTI on this successful 23rd Round bid, targeting an oil prospect in Jurassic Ettrick and Tweedsmuir Sands. This prospect is well defined with 3D seismic and by a hydrocarbon show of 2,650 bbl oil per day with 3.5 Mmcf of gas per day, tested from Jurassic Ettrick sands in well 15/26/b-5 drilled by another operator in 1988. Drilling of this prospect is scheduled for the fourth quarter of 2006.
In April, Oilexco signed a letter of agreement to extend the contract with Transocean for the Sedco 712 semi-submersible offshore drilling rig from the end of March 2006 to the end of March 2007. On November 8, 2005 the Company extended this contract further to the end of March 2008. The day rate for this period of extension has increased to $225,000 per day, from $140,000 per day in the March 2006 to March 2007 period. Having the Sedco 712 under contract for this extended period allows Oilexco to appraise and develop its drilling successes from its 2005-2006 UK North Sea exploration/appraisal program. This was a strategic decision made by Oilexco amid a rapidly tightening rig market for the years 2006 and 2007. Currently, all worthy semi-submersible drilling units in the North Sea have been contracted through to mid 2007, reflecting rapid increases in industry activity levels due to continued high world crude oil prices. Oilexco is currently evaluating several additional appraisal and exploration drilling opportunities to carry the Sedco 712 through its contracted period ending in March 2008.
Oilexco has initiated the process to become a Non-Operator Licensee in Norway. This is the first step for entry into the Norwegian sector of the North Sea. The formal process with the Norwegian authorities is expected to begin in January 2006.
Economic and industry trends in the oil and gas sector as outlined in the MD&A as at and for the year ended December 31, 2004 remain substantially unchanged. World prices for oil and natural gas continue to be high. Oil services and equipment costs are increasing as demand remains robust in the high commodity price environment.
Oilexco finished the third quarter ended September 30, 2005 in excellent financial condition. The Company maintained a strong cash position as in the year ended December 31, 2004, reflecting Oilexco's private placement of equity in February 2005 and the subsequent offering in June 2005. Equity funds will continue to be used for drilling activity in 2005 and 2006, and the anticipated Royal Bank of Scotland project financing facility will be used for the Brenda and Nicol developments. Current assets increased 86% from December 31, 2004, and working capital remained strong at $11.9 million. Current liabilities increased 55% at September 30, 2005 (compared to year-end 2004), reflecting an increase in payables accrued for third-quarter drilling operations in the UK North Sea. The Company expects levels of current liabilities to remain relatively high for the remainder of 2005 and into 2006, reflecting the UK exploration/appraisal drilling program. The share capital increase of 61% from the year end reflects the issuance of 5,385,000 common shares by private placement in February 2005 and the issuance of 31,000,000 common shares in June 2005. Oilexco may access equity markets to raise additional capital for the remainder of 2005 and into 2006.
Increased levels of activity in the UK North Sea during the third quarter ended September 30, 2005 also caused significant changes in comparative year-over-year trends in Oilexco's operating results. Oil and gas revenues increased 395% in the third quarter ended September 30, 2005 compared with the same period of 2004. Nine-month oil and gas revenues were up 351% compared with the same period of 2004. The increase in oil and gas revenues resulted from the acquisition of the Balmoral/Glamis oil production interests in September 2004. The Company expects oil prices to continue to be strong and to average more than US$50 per barrel. Oil and gas operating costs increased by 143% in the third quarter ended September 30, 2005 compared with the same period of 2004. Nine-month operating costs increased by 588%. The acquisition of the Balmoral/Glamis interests brought a relatively large fixed component of operating costs; however, when production from Brenda and Nicol commences, per-unit costs will fall dramatically due to increased volume of produced oil. The Company expects further increases in operating costs in 2005 due to continued inflationary pressures on oilfield services in the current high-oil-price environment.
General and administrative expenses increased by 152% in the third quarter ended September 30, 2005 compared with the same period of 2004. The Company's intense activity in the UK North Sea combined with its evolution into a producing company necessitates greater staffing requirements in both the Calgary and Aberdeen offices. Similarly, nine-month general and administrative expenses increased 205% compared with the same period of 2004. Overhead expenses are expected to continue to increase into 2006 and should plateau as first production from Brenda and Nicol commences. Oilexco has been successful in attracting well-qualified professionals to its staff due to the Company's business philosophy and its policy of rewarding employees with both share options and competitive salaries and benefit packages. Share incentive compensation expense levels increased for both the three month period and the nine month period because the Company continues to issue options in an environment of increasing share prices and increasing numbers of employees underpinned by an increasing share capital base.
The Company had a net loss of $12.5 million during the three months under review, 90% of which was due to stock-based compensation expense. For nine months, the loss was $15.7 million, 78% of which was due to stock-based compensation expense. During the same periods of 2004, the losses were $8.5 million and $8.5 million, respectively. The Company expects to continue to incur losses until late 2006, when oil production from Brenda and Nicol commences. Cash used in operating activities amounted to $0.7 million in the third quarter of 2005 compared with $0.2 million in the same period of 2004. For the nine month period, cash used in operating activities was $5.3 million in 2005 versus a small increase in cash from operating activities of less than $0.1 million for the same period of 2004.
During the period presented, the Company maintained a strong working capital position and a healthy cash balance. The Company has a strong payment record with suppliers and has preferred company status with several of its contractors. Negotiations are underway with the Royal Bank of Scotland for a project-financing facility to finance Brenda Field development and Nicol Field development.
RESULTS OF OPERATIONS
REVENUES
------------------------------------------------------------------------
------------------------------------------------------------------------
Three Months ended Nine Months ended
September 30, September 30,
2005 2004 % 2005 2004 %
-----------------------------------------------------
Oil and Gas North
America 291,937 355,529 -18% 924,551 1,085,091 -15%
Oil and Gas
- Discontinued
Operations
- Canada - 46,655 - - 189,958 -
Oil and Gas UK
North Sea 1,476,098 1,904 - 3,975,406 1,904 -
Inter-field Tariff 219,865 - - 776,905 - -
Interest Income 421,364 361,360 17% 665,821 461,324 44%
Other Income 1,166 7,234 -84% 3,901 12,806 -70%
-----------------------------------------------------
Total 2,410,430 772,682 212% 6,346,584 1,751,083 262%
------------------------------------------------------------------------
------------------------------------------------------------------------
Oil and gas revenues before royalties from North American operations amounted to $291,937 and $924,551 for the three and nine months ended September 30, 2005, respectively, compared with $355,529 and $1,085,091 for the same periods of 2004. The decrease in revenues can be attributed to lower production from Alabama due to temporary water problems, which is partially compensated by higher oil prices in 2005 than in 2004.
Revenues from discontinued operations in 2004 relate to the Forgan, Saskatchewan, operation, which was sold in December 2004.
Sales of oil and gas in the UK North Sea ($1,476,098 for the three months and $3,975,406 for the nine months ended September 30, 2005) relate to the Company's interest in the Balmoral and Glamis Fields acquired in September 2004.
The Company also realised income from inter-field tariffs ($219,865 for the three months and $776,905 for the nine months ended September 30, 2005). These represent the Company's interest in tariffs on third-party oil processed on the Balmoral Floating production facility in the UK North Sea.
The Company had marginal oil-and-gas revenues from the UK North Sea in the third quarter of 2004 as the interest in the Balmoral and Glamis Fields was acquired in September 2004.
Interest income in the periods under review resulted from interest on bank accounts and short-term deposits, as the Company had significant cash balances due to funds raised for the UK North Sea operations.
PRODUCTION AND PRICES
------------------------------------------------------------------------
------------------------------------------------------------------------
Three Months ended Nine Months ended
September 30, September 30,
2005 2004 % 2005 2004 %
-----------------------------------------------------
Oil and Gas
- BOE/day
North America(1) 43 79 -45% 54 86 -37%
UK North Sea 215 - - 223 - -
Average Oil and
Gas Price $/BOE
North America(1) 74.35 49.47 50% 62.48 46.49 34%
UK North Sea 75.61 - - 65.67 - -
Crude Oil as %
of Production(1)
North America 92% 94% -2% 94% 94% 0%
UK North Sea 98% - - 97% - -
------------------------------------------------------------------------
------------------------------------------------------------------------
(1) for comparison purposes, 2004 figures exclude discontinued operation
of Forgan, Canada, sold in December 2004.
Average daily sales of oil, gas and liquids in North America decreased by 45% and 37% for the three and nine months ended September 30, 2005 (respectively) compared with the same periods of 2004 and amounted to 43BOEPD and 54 BOEPD for the three and nine month periods ended September 30, 2005. The decrease resulted from significantly lower production from Alabama due to temporary water problems.
Average oil and natural gas prices in respect of the North American operation increased by 50% and 34% for the three and nine months ended September 30, 2005 compared with the same periods of 2004. The increase is attributable to the increase in worldwide crude oil prices during the periods under review.
OPERATING COSTS
------------------------------------------------------------------------
------------------------------------------------------------------------
Three Months ended Nine Months ended
September 30, September 30,
2005 2004 % 2005 2004 %
-----------------------------------------------------
Oil and Gas
Production
North America 33,611 40,731 -17% 137,433 125,528 9%
Discontinued
Operations
- Canada - 42,236 - - 87,066 -
UK North Sea 996,560 383,749 160% 3,366,620 383,749 778%
-----------------------------------------------------
1,030,171 466,716 121% 3,504,053 596,343 488%
Operating costs
$/BOE
North America(1) 8.56 5.67 51% 9.29 5.38 73%
UK North Sea 51.05 - - 55.61 - -
------------------------------------------------------------------------
------------------------------------------------------------------------
(1) for comparison purposes, the 2004 figures exclude the discontinued
operation of Forgan, Canada, sold in December 2004.
Operating expenses relating to oil and natural gas production in North America decreased by 17% in the three months ended September 30, 2005 and increased by 9% in the nine months ended September 30, 2005 compared with the same periods of 2004. The decrease reflects significantly lower production during the third quarter of 2005 compared with the third quarter of 2004. The overall increase in the nine months ended September 30, 2005 relates mainly to the increase in State Mineral Tax in Alabama in 2005.
Operating costs of discontinued operations in 2004 relate to the Forgan, Saskatchewan, operation, which was sold in December 2004.
Operating expenses per BOE increased by 51% and 73% in the three and nine months ended September 30, 2005 compared with the same periods of 2004. The increase resulted from an increase in State Mineral Tax in the third quarter of 2005 and significantly lower production levels in Alabama in 2005.
The operating expenses from the UK North Sea represent the Company's interest in the oil and gas production costs of the Balmoral and Glamis Fields as well as the Company's share of operating costs of the Balmoral floating production facility. The per BOE costs do not reflect the Company's share of the tariff income which offsets the relatively high fixed-costs component at the facility. The Company expects UK North Sea operating costs per BOE to decrease in 2006 when Brenda production comes on stream through the Balmoral facility.
ROYALTIES - North America
------------------------------------------------------------------------
------------------------------------------------------------------------
Three Months ended Nine Months ended
September 30, September 30,
2005 2004 % 2005 2004 %
-----------------------------------------------------
Royalties - North
America 58,269 74,469 -22% 184,963 219,072 -16%
Royalties
- Discontinued
Operations
- Canada - 39 - - 4,962 -
Royalties as % of
Oil and Gas Sales(1) 20% 21% -1% 20% 20% 0%
Royalties $/BOE(1) 10.82 9.25 17% 12.50 9.39 33%
------------------------------------------------------------------------
------------------------------------------------------------------------
(1) for comparison purposes, the 2004 figures exclude discontinued
operation of Forgan, Canada, sold in December 2004.
Royalties relate to the Company's operations in North America. The increase in royalties per BOE (17% for the three months and 33% for the nine months ended September 30, 2005, compared with the same periods of 2004) is a reflection of higher oil prices in 2005.
No royalties are payable on UK North Sea production from the Balmoral and Glamis Fields.
GENERAL AND ADMINISTRATIVE
------------------------------------------------------------------------
------------------------------------------------------------------------
Three Months ended Nine Months ended
September 30, September 30,
2005 2004 % 2005 2004 %
-----------------------------------------------------
General and
Administrative 2,009,692 796,202 152% 5,392,992 1,768,350 205%
Employees as at
September 30 17 8 - 17 8 -
------------------------------------------------------------------------
------------------------------------------------------------------------
The increase in general and administrative expenses in 2005 (compared with 2004) relates mainly to the addition of new employees and consultants at the Head Office in Calgary and the Oilexco North Sea Limited office in Aberdeen.
DEPLETION, DEPRECIATION AND ACCRETION
------------------------------------------------------------------------
------------------------------------------------------------------------
Three Months ended Nine Months ended
September 30, September 30,
2005 2004 % 2005 2004 %
-----------------------------------------------------
Depletion,
Depreciation
and Accretion
(DD&A) 483,228 72,895 563% 1,569,436 149,646 949%
Depletion,
Depreciation
and Accretion
(DD&A)
- Discontinued
Operation Canada - 2,608 - - 27,296 -
DD&A $/BOE 20.61 5.93 248% 20.83 5.47 281%
------------------------------------------------------------------------
------------------------------------------------------------------------
The increase in DD&A related mainly to a depletion charge recognised on Balmoral, UK (approximately $351,000 and $1,157,000 for the three and nine months ended September 30, 2005, respectively). Additionally, DD&A includes an accretion expense relating to the Assets Retirement Obligations ("ARO"), which for the UK North Sea operation amounted to approximately $100,000 in each of the first three quarters.
DD&A of discontinued operations in 2004 pertains to the Forgan, Saskatchewan, operation, which was sold in December 2004.
FOREIGN EXCHANGE
------------------------------------------------------------------------
------------------------------------------------------------------------
Three Months ended Nine Months ended
September 30, September 30,
2005 2004 % 2005 2004 %
-----------------------------------------------------
Foreign Exchange
(Gain)/Loss 60,891 1,416,967 -96% (913,850) (556,107) 64%
------------------------------------------------------------------------
------------------------------------------------------------------------
During the nine month periods presented, the Company recognised significant, unrealised gains on the translation of assets denominated in British pounds, which were partially compensated by foreign exchange losses on the translation of intercompany accounts. During the third quarter of 2005 and 2004, the Canadian dollar has strengthened further against the British pound, and the foreign exchange losses on the translation of intercompany accounts exceeded the unrealised gains on the translation of assets denominated in British pounds.
SHARE-BASED COMPENSATION
------------------------------------------------------------------------
------------------------------------------------------------------------
Three Months ended Nine Months ended
September 30, September 30,
2005 2004 % 2005 2004 %
-------------------------------------------------------
Stock-Based
Compensation
Expense 11,315,500 6,486,000 74% 12,275,000 7,956,000 54%
------------------------------------------------------------------------
------------------------------------------------------------------------
Compensation expense of $12,275,000 has been recognised for the nine months ended September 30, 2005 as a result of stock options granted to Company directors, employees and consultants to acquire common shares at an exercise price as follows:
- January 17, 2005 - 250,000 stock options at $3.25 per share;
- February 4, 2005 - 200,000 stock options at $3.18 per share;
- August 16, 2005 - 5,030,000 stock options at $3.35 per share.
All stock options vest immediately on the date of their grant. Fair value of each option granted is estimated on the date of grant using the Black-Scholes option pricing model (assumptions used for the model are discussed in the notes accompanying the Company's unaudited consolidated interim financial statements as at and for the three and nine month periods ended September 30, 2005).
NET LOSS AND CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
------------------------------------------------------------------------
------------------------------------------------------------------------
Three Months ended Nine Months ended
September 30, September 30,
2005 2004 % 2005 2004 %
-------------------------------------------------------------
Net Loss (12,547,321) (8,543,214) 47% (15,666,010) (8,414,479) 86%
Cash
(Used in)/
Provided by
Operating
Activities 306,384 (1,182,954) -142% (771,207) (152,986) 160%
------------------------------------------------------------------------
------------------------------------------------------------------------
The Company's net loss amounted to $12.5 million in the third quarter of 2005 versus a net loss of $8.5 million in the third quarter of 2004. Most of the increase in net loss in 2005 resulted from higher stock-based compensation expense and an increase in general and administrative expenses.
Cash used in operating activities increased in the nine months of 2005 to $0.8 million compared with $0.2 million in the same period of 2004. The increase in the cash used in operating activities is a result of increased general and administrative expenses incurred vis-a-vis continuous development of the Company's UK North Sea operation. Cash provided by operating activities in the third quarter of 2005 ($0.3 million) resulted from increased interest income in this quarter and relatively lower operating costs compared with the first and second quarters of 2005.
LIQUIDITY AND CAPITAL RESOURCES
Total net proceeds from financing activities in the first three quarters of 2005 amounted to $83.2 million.
On February 11, 2005, the Company closed a private placement of 5,385,000 Common Shares issued at Pounds Sterling 1.30 ($3.00) per share for gross proceeds of Pounds Sterling 7,000,500 ($16,155,000). The Agent was paid a 6.5% commission and was issued non-transferable warrants to purchase common shares equal to 6% of the shares issued under this private placement. Therefore, 323,100 Agent's Warrants have been issued, exercisable at a price equal to the subscription price under the private placement and with an expiry date of February 10, 2006. The fair value allocated to these warrants using the Black-Scholes option model was $217,700, which was recognised as share issue costs.
On June 27, 2005, the Company closed a short form prospectus of 31,000,000 common shares issued at Pounds Sterling 0.98 ($2.22) per share for gross proceeds of Pounds Sterling 30,400,000 ($68,820,000). The Agent was paid a 6.5% commission and was issued non-transferable warrants to purchase common shares equal to 6% of the shares issued under this short form prospectus. Therefore, 1,860,000 Agent's Warrants have been issued, exercisable at a price equal to the offering price under the short form prospectus and with an expiry date of June 27, 2006. The fair value allocated to these warrants using the Black-Scholes option model was $969,500, which was recognised as share issue costs.
Proceeds from the Company's warrants, agent's warrants and stock options exercised during the nine month period ended September 30, 2005 amounted to $817,535, $3,198,000 and $495,550, respectively. If (assuming) all outstanding warrants and stock options are exercised, the Company will realise additional gross proceeds of approximately $52.3 million.
The proceeds from the above sources and cash available at the beginning of the year were used to finance the Company's activities in the UK North Sea, which totalled approximately $71.7 million for the nine months ended September 30, 2005.
On May 20, 2005, a Bridge Facility Agreement ("Bridge Facility") for $21,973,000 (Pounds Sterling 10,000,000) was signed with the Royal Bank of Scotland plc ("RBS") to finance the early stage of development of the Brenda oil field and certain other North Sea assets of the Company. The bridge facility can be repaid at any time, but must be repaid in full by May 19, 2006 (maturity date). Interest rates are based on LIBOR plus a margin, which ranges from 3% to 6% per annum during the one-year period of the facility. Interest is paid monthly and upon maturity. The facility is secured by a first floating charge over Oilexco North Sea, a guarantee from Oilexco Incorporated, supported by charges over all shares of the parent's subsidiaries (Oilexco North Sea Limited and Oilexco America, Inc.), assignment of insurance proceeds from the Brenda and Balmoral fields and a first charge over the project bank account. On October 12, 2005, the Company utilised its Bridge Facility with a first drawing of $10,273,000 (Pounds Sterling 5,000,000). The loan has a maturity date of May 19, 2006 and bears interest at a rate of 7.52% per annum, payable upon maturity.
As at September 30, 2005, the Company had cash on hand of $34,066,506, net working capital of $11,881,336 and no long-tem debt.
COMPARATIVE BALANCE-SHEET ITEMS
September June September December
30, 2005 30, 2005 % 30, 2005 31, 2004 %
($ 000's) ----------------------------------------------------
Cash 34,067 58,445 -42% 34,067 19,045 79%
Current Assets 45,366 70,008 -35% 45,366 24,364 89%
Capital Assets 193,560 165,059 17% 193,560 122,747 58%
Current Liabilities 33,485 30,420 10% 33,485 21,671 55%
Share Capital 217,769 215,683 1% 217,769 135,502 61%
Shareholders'
Equity 197,361 196,679 0% 197,361 117,276 68%
------------------------------------------------------------------------
------------------------------------------------------------------------
As indicated in the above table, most items on the balance sheet increase as the Company issues equity and continues to develop its operations in the North Sea. The significant cash balance as at September 30, 2005 relates to funds received from the short form prospectus that was closed on June 27, 2005.
CONTRACTUAL OBLIGATIONS
Payments Due by Period
------------------------------------------------------------------------
------------------------------------------------------------------------
Less than 1-3 4-5 After 5
($ 000's) Total 1 Year Years Years Years
------------------------------------------------------------------------
Long term debt
principal - - - - -
UKCS Licences 239 239 - - -
Drilling Contract 172,732 48,018 124,714 - -
Sub-sea Contract 821 821 - - -
Office Leases 2,854 470 889 484 1,011
------------------------------------------------------------------------
Total Obligations 176,646 49,548 125,603 484 1,011
------------------------------------------------------------------------
------------------------------------------------------------------------
License obligations in the UK are on a graduated scale, increasing over time; however, Oilexco is obligated to pay its licence fees only until the end of August 2006.
The drilling contract represents the Company's obligation in respect to the Sedco 712 semi-submersible drilling unit. In April 2005, Oilexco North Sea Limited signed an agreement with Transocean to extend the contract by another 12 months until March 28, 2007, and in November 2005 the contract was extended for another 12 months until March 28, 2008. As at September 30, 2005, the Company's obligations for the next 29 months under these extended contracts with Transocean totalled approximately $172.7 million (US$148.8 million).
The sub-sea contract represents the Company's commitments to contractors relating to sub-sea work to develop the Brenda and Nicol fields and amounted to approximately $821,000 as at September 30, 2005.
The office-leases obligation represents the Company's commitments under operating lease agreements for the rental of office space in both Calgary and Aberdeen, UK.
The Company's projects in the UK North Sea require external financing. The Company will finance its projects utilising a combination of current cash and future cash flow, bank financing, farm-outs, exercise of warrants and options, and equity financing as needs arise. The Company is pursuing bank financing, field development plans and farm-outs; however, delays and unexpected outcomes could affect to the Company's ability to finance its operations on terms acceptable to the Company.
OILEXCO INCORPORATED
Consolidated Balance Sheets
As at
(unaudited)
September 30 December 31
Assets 2005 2004
------------------------------------------------------------------------
------------------------------------------------------------------------
Current Assets
Cash and Cash Equivalents $ 34,066,506 $ 19,045,429
Accounts Receivable 4,820,824 728,103
Other (Note 3) 6,478,811 4,590,828
------------------------------------------------------------------------
45,366,141 24,364,360
Capital Assets (Note 4) 193,559,768 122,747,357
------------------------------------------------------------------------
$ 238,925,909 $ 147,111,717
------------------------------------------------------------------------
------------------------------------------------------------------------
Liabilities and Shareholders' Equity
------------------------------------------------------------------------
------------------------------------------------------------------------
Current Liabilities
Accounts Payable and Accrued Liabilities $ 33,484,805 $ 21,670,945
Bank Loan (Note 5) - -
------------------------------------------------------------------------
33,484,805 21,670,945
------------------------------------------------------------------------
Assets Retirement Obligation 8,079,782 8,164,890
------------------------------------------------------------------------
Commitments (Note 9) - -
------------------------------------------------------------------------
Shareholders' Equity
Share Capital (Note 6) 217,768,962 135,501,547
Warrants (Note 6(b) and 6(C)) 1,502,800 -
Contributed Surplus 23,767,395 11,786,160
Deficit (45,677,835) (30,011,825)
------------------------------------------------------------------------
197,361,322 117,275,882
------------------------------------------------------------------------
$ 238,925,909 $ 147,111,717
------------------------------------------------------------------------
------------------------------------------------------------------------
The accompanying notes form an integral part of these consolidated
financial statements.
OILEXCO INCORPORATED
Consolidated Statements of Loss and Deficit
For the Periods Ended
(unaudited)
Three Months Three Months Nine months Nine months
September 30 September 30 September 30 September 30
2005 2004 2005 2004
------------------------------------------------------------------------
------------------------------------------------------------------------
Revenues
Oil and
Gas Sales $ 1,768,035 $ 357,433 $ 4,899,957 $ 1,086,995
Royalties (58,269) (74,469) (184,963) (219,072)
Inter-field Tariff 219,865 - 776,905 -
Interest Income 421,364 361,360 665,821 461,324
Other Income 1,166 7,234 3,901 12,806
------------------------------------------------------------------------
2,352,161 651,558 6,161,621 1,342,053
------------------------------------------------------------------------
Expenses
General and
Administrative 2,009,692 796,202 5,392,992 1,768,350
Operating 1,030,171 424,480 3,504,053 509,277
Depletion,
Depreciation and
Accretion 483,228 72,895 1,569,436 149,646
Foreign Exchange
(Gain)/Loss 60,891 1,416,967 (913,850) (556,107)
Stock-Based
Compensation
(Note 6(d)) 11,315,500 6,486,000 12,275,000 7,956,000
------------------------------------------------------------------------
14,899,482 9,196,544 21,827,631 9,827,166
------------------------------------------------------------------------
Net Loss before
Discontinued
Operations (12,547,321) (8,544,986) (15,666,010) (8,485,113)
Discontinued
Operations - 1,772 - 70,634
------------------------------------------------------------------------
Net Loss (12,547,321) (8,543,214) (15,666,010) (8,414,479)
Deficit, Beginning
of Period (33,130,514) (19,889,270) (30,011,825) (20,018,005)
------------------------------------------------------------------------
Deficit, End
of Period $(45,677,835) $(28,432,484) $(45,677,835) $(28,432,484)
------------------------------------------------------------------------
------------------------------------------------------------------------
Basic and Diluted
Net Loss per
Share
(Note 6(e)) $ (0.08) $ (0.09) $ (0.12) $ (0.10)
------------------------------------------------------------------------
------------------------------------------------------------------------
The accompanying notes form an integral part of these consolidated
financial statements.
OILEXCO INCORPORATED
Consolidated Statements of Cash Flows
For the Periods Ended
(Unaudited)
Three Months Three Months Nine months Nine Months
September 30 September 30 September 30 September 30
2005 2004 2005 2004
------------------------------------------------------------------------
------------------------------------------------------------------------
Cash Flow from
Operating
Activities
Net Loss -
Continued
Operations $(12,547,321) $ (8,544,986) $(15,666,010) $ (8,485,113)
Net Earnings -
Discontinued
Operations - 1,772 - 70,634
Items Not
Affecting Cash
Depletion,
Depreciation &
Accretion
- Continued
Operations 483,228 72,895 1,569,436 149,646
Depletion,
Depreciation &
Accretion
- Discontinued
Operations - 2,608 - 27,296
Unrealised
Foreign
Exchange
Loss/(Gain) 1,054,977 798,757 1,050,367 128,551
Stock-Based
Compensation 11,315,500 6,486,000 12,275,000 7,956,000
------------------------------------------------------------------------
306,384 (1,182,954) (771,207) (152,986)
Changes in
Non-Cash
Working
Capital (1,421,564) 999,623 (4,881,143) 202,602
------------------------------------------------------------------------
Net Cash
(Used in)/
Provided by
Operating
Activities (1,115,180) (183,331) (5,652,350) 49,616
------------------------------------------------------------------------
Cash Flow from
Financing
Activities
Proceeds from
Issuance of Common
Shares, net of
Share Issue
Costs 1,914,092 8,611,259 83,160,850 50,886,432
Net proceeds
from Issuance
of Special
Warrants - 35,535,300 - 35,535,300
Cash Held in Trust - - - 5,888,728
Changes in
Non-Cash
Working Capital (513,580) 240,517 - 50,000
------------------------------------------------------------------------
Net Cash Provided
by Financing
Activities 1,400,512 44,387,076 83,160,850 92,360,460
------------------------------------------------------------------------
Cash Flow from
Investing
Activities
Additions to
Capital Assets (28,889,583) (20,691,460) (71,716,499) (75,518,519)
Changes in
Non-Cash
Working Capital 4,948,094 2,645,735 10,714,299 1,974,211
------------------------------------------------------------------------
Net Cash Used in
Investing
Activities (23,941,489) (18,045,725) (61,002,200) (73,544,308)
------------------------------------------------------------------------
Net Increase/
(Decrease) in
Cash (23,656,157) 26,158,020 16,506,300 18,865,768
Net Effect of
Foreign Exchange
on Cash Held in
Foreign
Currencies (722,417) (810,882) (1,485,223) (108,409)
Cash and Cash
Equivalents -
Beginning of
Period 58,445,080 14,302,485 19,045,429 20,892,264
------------------------------------------------------------------------
Cash and Cash
Equivalents -
End of Period $ 34,066,506 $ 39,649,623 $ 34,066,506 $ 39,649,623
------------------------------------------------------------------------
------------------------------------------------------------------------
Interest Paid - - - -
Income Taxes Paid - - - -
------------------------------------------------------------------------
------------------------------------------------------------------------
The accompanying notes form an integral part of these consolidated
financial statements.
NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS AS AT AND FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2005 AND 2004
All amounts are presented in Canadian dollars unless otherwise noted.
bcjt
19 years ago
Oilexco Inc (TSX-V:OIL)
Shares Issued 10,927,689
Last Close 11/9/2004 $2.15
Wednesday November 10 2004 - News Release
Mr. Arthur Millholland reports
OILEXCO ANNOUNCES ITS 3RD QUARTER RESULTS
Oilexco Inc. has provided its financial results for the third quarter, and for the nine-month period ending Sept. 30, 2004.
Oil and gas revenues before royalties for the three months ended Sept. 30, 2004, were $404,088 versus $368,886 for the same period last year. Oil and gas revenues before royalties for the nine months ended Sept. 30, 2004, were $1,276,953 versus $1,172,695 for the same period last year. Period-to-period change was an increase of 10 per cent for the quarter and an increase of 9 per cent for the nine months of the year mainly due to higher realized oil prices.
Interest income was significant for both the three-month and nine-month periods and is a reflection of cash balances that were held.
Sales of oil, gas and liquids averaged 88 barrels of oil equivalent per day and 103 barrels of oil equivalent per day during the third quarter ended Sept. 30, 2004, and 2003 respectively. Sales volumes for the period of nine months ended Sept. 30, 2004, and 2003 amounted to an average of 100 barrels of oil equivalent per day and 102 barrels of oil equivalent per day, respectively. The decrease was due to the fact that there were a few shut-in days in Alabama due to the Ivan hurricane. Additionally, there was a decrease in sales of oil from Forgan field due to a change of the processing operator. Average oil and natural gas prices increased by 26 per cent from third quarter of 2003 compared with the third quarter 2004. For the nine-month period ended Sept. 30, average oil and natural gas prices increased by 29 per cent for comparative periods of 2003 and 2004. The increase is attributable to worldwide crude oil prices being significantly higher in 2004 than in 2003. No production from the interest in Balmoral and Glamis joint ventures is accounted for as the facility was shut down for maintenance and recertification in September, 2004, resuming production in late October.
Operating expenses related to oil and natural gas production for the three months ended Sept. 30, 2004, were $82,967, an 88-per-cent increase from the same period last year of $44,231. For the nine months ended Sept. 30, 2004, operating expenses increased by 15 per cent from $185,249 in 2003 to $212,594 in 2004. Operating expenses related to oil and natural gas production were higher in third quarter of 2004 due to well workovers and pipeline repairs which were conducted in earlier quarters during 2003. Additionally, for the first time, the company has recognized operating expenses from Balmoral of $383,749 representing its interest in September, 2004, Balmoral operating costs. The majority of these costs are one-time expenditures related to maintenance and recertification of the production facility.
Royalties for the quarter ended Sept. 30, 2004, increased 16 per cent to $74,508 from $64,355 in the same quarter of 2003. Royalties for the nine-month period ended Sept. 30, 2004, increased 10 per cent to $224,034 from $204,419 in the same period of 2003. The increase is a reflection of higher gas and oil prices.
General and administrative expenses increased to $796,202 from $224,120 for the three months ended Sept. 30, 2004, and 2003 and increased to $1,768,350 from $710,828 for the nine months ended Sept. 30, 2004, and 2003. The significant increase relates mainly to the addition of four full-time employees, one consultant and expenses due to intensified activity in the United Kingdom North Sea operation.
Depreciation and depletion expense decreased for the three months ended Sept. 30, 2004, to $75,503 from $142,746 for the same quarter last year. For the nine-month period ended Sept. 30, 2004, depreciation and depletion expense decreased to $176,942 from $417,769 for the same period last year. The decrease was due to depletion rates based on a lower cost base.
During third quarter of 2004 the company had a significant foreign exchange loss of $1,416,967 as the Canadian dollar strengthened against the British pound. However, the third quarter losses did not override significant gains recognized by the company in first half of 2004 when both the pound and the U.S. dollar were strengthening against the Canadian dollar. Accordingly, the cumulative gain of $556,107 was recorded for nine months ended Sept. 30, 2004. The foreign exchange loss of $10,556 and $21,473 for three and nine months ended Sept. 30, 2003, respectively were nominal and resulted from the company's operations in the United States.
A compensation expense of $6,486,000 has been recognized for the quarter ended Sept. 30, 2004, as a result of 3.45 million stock options granted to directors, officers, employees and consultants to acquire common shares at an exercise price of $3.46 per share. During the first and second quarter of 2004, 200,000 and 920,000 stock options were granted to directors, officers, employees and consultants with an exercise price of $2.30 and $1.91 per share, respectively. As a result, the company recognized respective expense of $300,000 for the first quarter and $1.17-million for the second quarter of 2004. All stock options vest immediately on the date of their grant.
Net loss for the three months ended Sept. 30, 2004, was $8,543,214 versus a loss of $220,511 for the same period last year. For the nine months ended Sept. 30, 2004, net loss amounted to $8,414,479 versus a loss of $455,919 for the comparative period of 2003.
Funds flow to/from operations decreased for the three months ended Sept. 30, 2004, to $1,182,954 from $29,235 for the same period last year. For the nine months ended Sept. 30, 2004, funds flow from operation decreased to $152,986 from $68,850 for the same period last year. The decrease relates primarily to a significant increase in general and administrative expenses as compared with the same periods of 2003, a large foreign exchange loss recorded in third quarter and additional operating costs related to the Balmoral. Operating costs from Balmoral were disproportionate for the period because no oil volumes were nominated for lifting in September, 2004.
Total gross proceeds from financing activities during the period totalled $92.7-million.
During the nine-month period, the company's agents exercised the overallotment option in connection with the company's December, 2003, public offering. Gross proceeds of $4,546,740 were raised representing 4,133,400 units at a price of $1.10 per unit. Each unit consists of one common share and one-quarter common share purchase warrant. Each common share purchase warrant entitles the holder to purchase one common share at $1.65 per share until Jan. 16, 2006.
On April 15, 2004, the company closed a private placement of 19 million special warrants. The private placement consisted of 3,285,000 special warrants issued at 0.84 pound sterling for gross proceeds of 2,759,400 pounds sterling, and 15,715,000 special warrants issued at $2.02 for gross proceeds of $31,744,300, for total gross proceeds of $38.38-million. Each special warrant is exercisable into a unit consisting of one common share and one common share purchase warrant exercisable for an additional common share at 0.99 pound sterling or $2.38, for a maximum of 19 million common shares. The warrant may be exercised within 21 business days after the earlier of receipt of the final prospectus qualifying the issuance of the common shares or the third business day after the expiry of the four-month Canadian hold period.
The proceeds from the company's warrants and stock options exercised during the nine-month period ended Sept. 30, 2004, amounted to $49,776,088 and $415,900, respectively. Assuming all outstanding warrants and stock options are exercised, the company would realize additional gross proceeds of approximately $37.2-million. During January, 2004, the company instructed its agent to transfer cash of $5,888,728 held in trust as at Dec. 31, 2003, into Oilexco U.K. subsidiary's account. The proceeds from above sources as well as cash available at the beginning of the nine-month period ended Sept. 30, 2004, were used to finance the U.K. North Sea drilling project of approximately $75.5-million for the nine months of 2004.
Oilexco is currently pursuing projects that may require additional financing. In general, Oilexco finances its domestic capital program through the use of internal cash flow. However, its projects in the U.K. North Sea require external financing. At the end of the period ended Sept. 30, 2004, the company had cash on hand of $39,649,623 with a net working capital of $34,678,603 and has no long-term debt.
Oilexco commenced the second phase of its Brenda appraisal drilling program on licence P1042 (100-per-cent working interest), block 15/25b in the Outer Moray Firth, targeting oil in the Paleocene Forties sandstone in July. The 15/25b-10 well, the first well of the second phase was drilled under a four-well drilling contract executed in June with Transocean, consisting of one firm well and three option wells commenced drilling operations on July 2 with the semi-submersible Transocean J.W. McLean. This well, the fourth Brenda appraisal well and sixth wellbore inclusive of sidetracks, was drilled approximately two kilometres west of the Oilexco appraisal well 15/25b-8 and 1.2 kilometres north of the Oilexco appraisal well 15/25b-9. The 15/25b-10 well was successful, flowing 3,351 barrels per day of 40-degree API oil from the Paleocene Forties sand on drill stem test. The oil flow was through a 48/64-inch choke at 387 pounds per square inch flowing wellhead pressure from 35 feet of perforations at the top of a 50-foot gross pay section. Upon completion of the 15/25b-10 well, Oilexco exercised its option with Transocean on two of the option wells, leaving one option well in the contract.
In April, 2004, the corporation applied for an "out-of-round" extension to block 15/25b. On Aug. 6, 2004, the DTI offered 100 per cent of an oil and gas production licence block 15/25e (east of longitude 0 degrees 52 minutes east) to Oilexco's wholly owned subsidiary, Oilexco North Sea Ltd. This new licence will cover the balance of the seismically defined limits of the Brenda oil accumulation in the adjacent block to the east, 15/25b. In addition, an out-of-round offer was also made to both Oilexco North Sea Ltd. and CNR International under a marriage arrangement for block 15/25f, west of the defined line of longitude. Oilexco has accepted both licence awards.
Also during August, 2004, the corporation's wholly owned subsidiary, Oilexco North Sea Ltd., agreed to acquire for cash the interests of Pentex Oil U.K. Ltd. in the currently producing Balmoral and Glamis light oil fields, and the Balmoral floating production vessel, block 16/21 in the Outer Moray Firth. The agreement to purchase was subject to, amongst other things, waiver of partners' pre-emptive rights, government and regulatory approvals, all of which have been satisfied. Closing of the transaction effective Jan. 1, 2004, occurred Sept. 16, 2004. The interests acquired are: 9.714 per cent in production licence 201, as it relates to the Balmoral field, the Glamis field and the second residual area within block 16/21a; 7.994 per cent in the unitization and unit operating agreement relating to the Balmoral field; and 7.910 per cent in the Balmoral floating production vessel (a production facility). Oil production relating to the interests purchased by the corporation in the Balmoral and Glamis fields amounts to approximately 245 barrels per day. The interests acquired by Oilexco North Sea are strategic to Oilexco's U.K. North Sea business plan. The Balmoral floating production vessel is located eight kilometres northeast of Oilexco's Brenda oil find located in the adjoining block, 15/25b. Oilexco views a subsea "tie back" to Balmoral as a logical option for early production of a portion of the Brenda oil accumulation, as there is in excess of 50,000 barrels per day of unused oil treating capacity on the Balmoral production facility. In addition, the Balmoral floating production vessel carries significant residual value as it can be remobilized to other locations upon decommissioning of the Balmoral producing field.
Drilling operations in Mountrail county, North Dakota, commenced on the Lund 42-9 well (Section 9, T.155N. R.92W.) on Aug. 30, 2004. This well was to test the potential of both the upper Cretaceous gas and Mississippian oil zones. Oilexco retained a 30-per-cent working interest in this well. The Lund 42-9 well encountered significantly anomalous gas shows in the upper Cretaceous and oil shows in the Mississippian. The operator was considering casing the upper Cretaceous to perform a completion that would exploit the gas reserves encountered in this well. Its decision however was to plug and abandon the well on Sept. 12, 2004, based on their desire to drill another test well with cores proposed in both the upper Cretaceous and Mississippian potential zones.
On Sept. 15 the semi-submersible Transocean John Shaw came on contract to commence drilling operations on the second well of the second phase of the Brenda appraisal program. This well 15/25e-11, located 1.5 kilometres northwest of the 15/25b-10 appraisal well was the first of three penetrations of a "well cluster" to be drilled from a central location. It was immediately followed by 15/25e-11Z, located 1.25 kilometres west of the 15/25e-11 bottom-hole location, and 15/25e-11Y located one-kilometre northwest of the 15/25e-11 bottomhole location. The objectives in the drilling of this well cluster under Oilexco's Brenda appraisal program were to define the western and northwestern limits of the "Brenda West" Paleocene Forties sand oil accumulation. The oil/water contact intersected by the 15/25e-11 wellbore was at a higher elevation than that intersected in the Oilexco 15/25b-10 well located 1.5 kilometres to the southeast. The difference in elevation suggests the 15/25e-11 "well cluster" is evaluating another oil accumulation, which may be separate from the "Brenda West" oil accumulation currently defined by the Oilexco wells 15/25b-9 and 15/25b-10. This additional accumulation was confirmed by the third wellbore of the cluster 15/25e-11Y, located one kilometre northwest of the 15/25e-11 location. The second wellbore of the cluster 15/25e-11Z, located 1.25 kilometres west of 15/25e-11, met its designed objectives in the appraisal program by successfully encountering oil-bearing Brenda Paleocene Forties sand pay near its western limit. Drill stem testing operations were not undertaken on the 15/25e-11Y wellbore. This was due to thin oil pay, limiting the future use of this vertical wellbore as a possible production well. Currently Oilexco is assimilating the results of the 15/25e-11 well cluster into its geologic/geophysical interpretation. Additional drilling north and up dip of this cluster may be warranted, as the thin oil column covering this broad area appears to be of potential significance.
Subsequent to the end of the period, Oilexco awarded Transocean a one-year firm contract for the provision of the semi-submersible drilling unit Sedco 712 commencing on or about March 1, 2005. The Sedco 712 will be used on Oilexco's 2005/2006 development and appraisal work program centred on Oilexco's Brenda oil accumulation in block's 15/25b and 15/25e located in the Outer Moray Firth area of the central U.K. North Sea, and on additional prospects and farm-in opportunities identified by Oilexco in its focus areas. The Sedco 712 is ideally suited for Oilexco's development and appraisal program; consisting of in-fill drilling, completions and installation of subsea trees. The drilling unit, currently stacked in Invergordon Scotland, had been working on development projects for a major multinational integrated oil company for several years until November of last year. Transocean has indicated the Sedco 712 will require 4.5 months of premobilization maintenance and refitting which will commence in November. The results to date in the North Sea are extremely encouraging and substantiate its belief that the North Sea offers tremendous opportunities for companies with its business model. All of Oilexco's future activities will be solely focused in the U.K. North Sea.
Future operations at Brenda will focus on the development of the Brenda East and Brenda West Paleocene Forties sand oil accumulations. Oilexco intends to file a development plan early next year (2005) with the U.K. Department of Trade and Industry for the development of these areas. Production will be tied back to the Balmoral floating production facility eight kilometres to the northeast, in which Oilexco holds a 7.91-per-cent equity interest. Oilexco's production engineering effort is currently focused on a design concept for a maximum initial production rate of 35,000 barrels of oil per day from Brenda. This production rate can be handled by the Balmoral production facility where the unused oil treating capacity is currently in excess of 50,000 barrels per day. First oil is targeted for the fourth quarter of 2005.
Independent engineering evaluation of Oilexco's U.K. North Sea reserves under National Instrument 51-101 has commenced. Completion of the report to be dated at Dec. 31, 2004, is scheduled for the first quarter 2005.
The interim report for the third quarter and nine months ended Sept. 30, 2004, for Oilexco is available on Stockwatch SEDAR files, at www.sedar.com.
WARNING: The company relies upon litigation protection for "forward-looking" statements.
© 2004 Canjex Publishing Ltd.
Level up your trading with our powerful tools and real-time insights all in one place.
Hot Features
Premium
