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Traverse Energy Ltd V.TVL


Primary Symbol: TVETF

Traverse Energy Ltd is a Canada-based company. The Company is engaged in oil and gas exploration, development and production activities. It conducts its operations in the province of Alberta. The Company’s assets are located in the Carbon, Turin and Greater Coyote areas of Alberta as well as in the Duvernay land base located in the Buffalo Lake, Chigwell and Pigeon Lake areas of Alberta. The Greater Coyote area includes properties in the Chain Lakes, Coyote, Hanna, Michichi, and Watts areas of Alberta.


GREY:TVETF - Post by User

Bullboard Posts
Post by SammyBoyon Nov 24, 1999 6:55pm
165 Views
Post# 1097587

T.ROI JUST ANNOUNCE POSITIVE EARNINGS NOW!

T.ROI JUST ANNOUNCE POSITIVE EARNINGS NOW! 112 CC 24-Nov-99 at 18:38:00 18:50 Reserve Royalty Corporation Positive Earnings in Turnaround Quarter Symbol: ROI Industry: OIL Subject: ERN NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS FOR: RESERVE ROYALTY CORPORATION TSE SYMBOL: ROI NOVEMBER 24, 1999 Reserve Royalty Corporation Positive Earnings in Turnaround Quarter CALGARY, ALBERTA--Reserve Royalty Corporation (TSE:ROI) is pleased to announce the financial results for its Third Quarter. Highlights for 1999 are the completion of conversion activities associated with our acquisition of late 1997, and restoration of financial strength and balance when comparing assets and debt. Staff and management are now focused on growth activities buoyed by strong commodity prices and high levels of drilling activity being undertaken on our royalty lands. Financing Reserve Royalty has worked diligently in 1999 to restore financial strength to the Company and restructure the bank debt. During the first nine months of 1999 bank debt had been reduced from $100.2 million to the $44.2 million outstanding at September 30, 1999. Upon closing the new bank credit facility in early December, the Company will have long term bank debt below $39 million and positive working capital of approximately $5 million. During the third quarter of this year the Company evaluated a potential merger opportunity which was hoped to be a catalyst for the new growth in Reserve Royalty. Those discussions have not resulted in an agreement and are not being pursued as the Board of Directors believes the company has sufficient strength and other opportunities to catalyze growth which would be less dilutive at this time. Results The results of operations for the nine months ended September 30, 1999 continue to reflect the transition period for Reserve Royalty. During this period there has been a substantial conversion of the working interest properties into cash and new royalties, increases in royalty volumes, and a reduction in the burdens of interest and general & administrative expenses. The results for the third quarter of 1999 represent the first full quarter of results as a royalty company after the major disposition of working interests in May 1999. These results reflect higher commodity prices, lower interest expenses, and lower general & administrative expenses. The Company reports a profit in the third quarter of 1999 reflective of the successful turnaround. Funds from operations for the nine months to September 30, 1999 were $6.1 million versus $15.4 for the same period in 1998. On a per share basis this represents $0.06, compared with $0.16 for the first nine months of 1998. Funds from operations for the third quarter of 1999 were $2.6 million compared with $1.4 million for the second quarter of 1999. The production profile shifted significantly during the first nine months of 1999 as a result of the conversion process. With the reduction in working interest volumes, resource revenue from oil & gas properties, after deducting royalties and production expenses, was $14.2 million versus $23.2 million for the same period in 1998. Average royalty production for the nine months to September 30, 1999 was 1,575 BOE per day with a netback of $20.94 per BOE, and working interest production was 1,554 BOE per day with a netback of $12.14 per BOE. Average royalty production during the third quarter of 1999 was 1,620 BOE per day with a netback of $23.85 per BOE, and working interest production was 370 BOE per day with a netback of $14.45 per BOE. These results for the third quarter of 1999 reflect the 91% increase in light crude oil prices from US$12.45 per barrel WTI in January 1999 to US$23.79 per barrel WTI September. Interest and financing expenses for the third quarter of 1999 were $0.9 million compared to $1.6 million for the first quarter of 1999 and $1.1 million for the second quarter of 1999. The reduced burden of interest expense correlates with the reduction in debt. Administration expenses on a monthly basis have been reduced by 42% from January to September 1999. This reduction reflects the elimination of most of the working interest production which required proportionately more resources to manage. Administrative expenses reported for the second and third quarters of 1999 included $181,000 and $168,000 respectfully for staffing and restructuring expenses associated with the conversion of the working interests. Reserve Royalty reports a loss for the nine months ended September 30, 1999 of $2.8 million, compared with a loss of $2.9 million for the first nine months of 1998. Earnings for the third quarter of 1999 were $0.01 per share compared with a loss of $0.02 per share for the third quarter of 1998. Debt was principally retired through proceeds from the disposal of oil & natural gas properties of $51.9 million during the first nine months of 1999. During this same period, capital expenditures were $2.7 million related to the working interest properties. The Company created substantial new royalties on the working interest properties and undeveloped lands turned over to industry partners. As Reserve Royalty moves forward cashflow will be reinvested into the creation of new royalties through financing transactions, or through the acquisition of existing royalties being offered within the industry. Year 2000 Compliance (Y2K) The Company has addressed the Y2K computer issue, being the ability of computers and imbedded processing chips to property function during the change from 1999 to 2000. The Company is satisfied that its internal systems and those of its direct service providers are Y2K compliant. The conversion of properties to royalties has substantially reduced the amount of directly operated field equipment subject to this potential problem. The Company has not obtained unqualified opinions from the operators of the properties producing hydrocarbons that existing systems and field equipment is compliant, nor has the Company obtained unqualified opinions from the major transporters and buyers of production that their systems are Y2K compliant. However, the majority of the Company's production is operated by public companies that have disclosed to their shareholders that they are compliant. The Company has completed its upgrade program associated with Y2K compliance, but is unable to assess potential costs for systems operated by others. The potential impact of non-compliant applications by others operating royalty production could range from inconvenience, such as the delay in receipt of revenue, to complete shut-down of production for an indeterminate period of time. The Company is unable to economically insure against potential losses. However, the Company's production base is diversified across numerous operators, producing areas, wells, and facilities. Outlook Reserve Royalty has regained financial strength and the ability to invest cashflow into new royalties at a time when the oil & gas industry is very receptive to this type of financing. The Company will focus on royalty transactions which provide superior returns to our shareholders. The Company has a significant asset base of proven reserves of a 12 year reserve life, royalties on over 4 million acres of undeveloped land, 2.5 million acres of which is in Western Canada, and working capital of $5 million. With higher commodity prices from mid 1999, the oil & gas industry is actively drilling our undeveloped lands and expanding current production areas. To the end of October, 62 wells had been drilled on our lands, another 50 to 60 wells are licensed for fourth quarter drilling, and our major royalty partners have been successful in bringing on additional production from existing producing areas. These drilling and exploitation programs will continue to add to our royalty volumes and reserve values. /T/ CONSOLIDATED BALANCE SHEETS ------------------------------------------------------------------------ (Unaudited - thousands) 30 Sept. 31 Dec. 1999 1998 ------------------------------------------------------------------------ Assets Current Cash $ 83 $ 200 Marketable securities, at the lower of cost or market (market $2,748; 1998 - $1,831) 1,367 1,831 Accounts receivable 4,773 11,940 Inventory, prepaid expenses and deposits 663 1,444 Note receivable - 700 ------------------------------------------------------------------------ 6,886 16,115 Petroleum and natural gas properties 151,954 212,693 ------------------------------------------------------------------------ $158,840 $228,808 ------------------------------------------------------------------------ ------------------------------------------------------------------------ Liabilities and Shareholders' Equity Current Accounts payable and accrued liabilities $ 3,336 $ 10,155 Current portion of long-term debt 18,346 38,866 ------------------------------------------------------------------------ 21,682 49,021 Long-term debt 25,828 61,314 Hedging contracts assumed on acquisition - 1,710 Future site restoration provision 452 3,090 ------------------------------------------------------------------------ 47,962 115,135 ------------------------------------------------------------------------ Shareholders' equity Share capital 212,558 212,558 Deficit (101,680) (98,885) ------------------------------------------------------------------------ 110,878 113,673 ------------------------------------------------------------------------ $158,840 $228,808 ------------------------------------------------------------------------ ------------------------------------------------------------------------ CONSOLIDATED STATEMENTS OF OPERATIONS & RETAINED EARNINGS (DEFICIT) ------------------------------------------------------------------------ ------------------------------------------------------------------------ (Unaudited - thousands, except per share amounts) Three Months ended Nine Months ended Sept. 30 Sept. 30 1999 1998 1999 1998 ------------------------------------------------------------------------ Resource revenue $ 4,196 $ 8,559 $16,329 $ 32,502 Investment, gas marketing and hedging income (loss) 16 (1,076) (1,806) (530) ------------------------------------------------------------------------ 4,212 7,483 14,523 31,972 Expenses Administration (759) (978) (2,669) (2,995) Interest and financing (908) (1,709) (3,621) (4,840) Production (259) (1,835) (2,052) (6,570) Royalties 102 (669) (121) (2,699) Depletion, depreciation and amortization (2,106) (4,370) (8,926) (17,027) ------------------------------------------------------------------------ Earnings (loss) before income taxes 282 (2,078) (2,866) (2,159) ------------------------------------------------------------------------ Provision for income taxes Current 257 (260) 71 (597) Deferred - 757 - (173) ------------------------------------------------------------------------ 257 497 71 (770) ------------------------------------------------------------------------ Earnings (loss) for the period 539 (1,581) (2,795) (2,929) Retained earnings (deficit), beginning of period (102,219) 7,354 (98,885) 8,702 ------------------------------------------------------------------------ Retained earnings (deficit), end of period $(101,680) $ 5,773 $(101,680) $ 5,773 ------------------------------------------------------------------------ ------------------------------------------------------------------------ Earnings (loss) per common share, basic and fully diluted $ 0.01 $ (0.02)$ (0.03) $ (0.03) ------------------------------------------------------------------------ Weighted average number of common shares outstanding 102,252 95,933 102,252 95,943 ------------------------------------------------------------------------ ------------------------------------------------------------------------ CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION ------------------------------------------------------------------------ ------------------------------------------------------------------------ (Unaudited - thousands, except per share amounts) Three Months ended Nine Months ended Sept. 30 Sept. 30 1999 1998 1999 1998 ------------------------------------------------------------------------ Net inflow (outflow) of cash related to the following activities: Operations Earnings (loss) for the period $ 539 $(1,581) $(2,795) $(2,929) Writedown of marketable securities - 1,100 - 1,100 Depletion, depreciation and amortization 2,106 4,370 8,926 17,027 Deferred income taxes - (757) - 173 ------------------------------------------------------------------------ Funds from operations 2,645 3,132 6,131 15,371 Net change in non-cash working capital items (1,254) 5,463 2,293 (10,691) ------------------------------------------------------------------------ Cash provided by operating activities 1,391 8,595 8,424 4,680 ------------------------------------------------------------------------ Financing Issue of common shares, net of issue costs - 84 - 194 Long-term debt (5,920) (41,220) (35,486) (42,265) Current portion of long-term debt 4,883 35,960 (20,520) 35,960 Payment on hedging contracts assumed on acquisition - (207) (1,710) (583) ------------------------------------------------------------------------ Cash provided by financing activities (1,037) (5,383) (57,716) (6,694) ------------------------------------------------------------------------ Investments Petroleum and natural gas properties (508) (2,917) (2,704) (13,611) Proceeds on disposal of petroleum and natural gas properties 30 (389) 51,879 15,617 ------------------------------------------------------------------------ Cash provided by (used in) investing activities (478) (3,306) 49,175 2,006 Decrease in cash during the period (124) (94) (117) (8) Cash, beginning of period 207 98 200 12 ------------------------------------------------------------------------ Cash, end of period $ 83 $ 4 $ 83 $ 4 ------------------------------------------------------------------------ ------------------------------------------------------------------------ Funds from operations per common share: Basic $ 0.03 $ 0.03 $ 0.06 $ 0.16 Fully diluted $ 0.03 $ 0.03 $ 0.06 $ 0.15 ------------------------------------------------------------------------ ------------------------------------------------------------------------ /T/ Reserve Royalty Corporation is an innovative financial company which creates gross overriding royalties in the oil & gas industry through off-balance-sheet financing for industry partners and by the re-deployment of oil and gas assets acquired by the company in corporate transactions. -30- FOR FURTHER INFORMATION PLEASE CONTACT: Reserve Royalty Corporation Fiona Read President & CEO (403) 266-3542 or Reserve Royalty Corporation William Ostlund Vice President & CFO (403) 266-3542 INDUSTRY: OIL SUBJECT: ERN -0-
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