Choice Announces Second Quarter Financials10/28/04
CALGARY, ALBERTA, Oct 28, 2004 (CCNMatthews via COMTEX) --
Mr. Gordon Harris, President and CEO of Choice Resources Corp., is pleased to report financials for the six months ended August 31, 2004. The six-month period continued to show improved profitability of the Corporation as earnings of $1.3 million were re
ported representing 3 cents per share. Production for the period is up 50%, G&A is down 42% and net Debt is reduced 21% compared to the six-month period of last year. Net Debt was reduced 40% from year-end. As discussed in the annual report and prior quarter, the Corporation embarked on an aggressive restructuring program reflected in the current results.
Cash flow from operations for the six months was $4.3 million translating to 11 cents per share on a weighted average basis and to 10 cents per share based on 44.2 million shares issued and outstanding at the end of the period.
The Corporation continues to add to its play inventory and implement its strategies. During the second quarter the Corporation participated in three wells. All were cased and completed. A six square mile 3-D seismic program was shot and processed. The results have led to two immediate exploitation opportunities and subsequent analysis has indicated four exploration targets with high reserves potential. Subsequent to the quarter end the program was expanded. We are currently in discussions with third parties to participate in these plays. An exploitation well with a potential resource base between 30 and 80 Bcf is budgeted to be drilled before our fiscal year end. Also at Pincher Creek, the Company re-entered an old well bore during June/July and whip stocked directionally from this location. The re-entry tested 1.5 million cubic feet per day of raw gas but down-hole mechanical problems led to a suspension of operations pending a full review. The flow rate compared to the average current well productivity of 600 mcf per day of raw gas, and indicates that there is excellent exploitation potential left in the central part of our pool.
The exploration program remains in its infancy as seismic and geological mapping continue. The Corporation continues to search for high reward projects with considerable upside potential. The Corporation has entered into three high impact plays at moderate depths of less than 1500 meters. Seismic activity continues on these plays with drilling of three to five exploratory wells prior to year-end. A target of six to ten exploratory plays is expected for year-end.
The Corporation has identified a Coal Bed Methane project and has put two wells on stream at a combined production level of 300 mcf/d. We are in the process of completing one other well and drilling a fourth well into this project. Seven sections of land have been accumulated and this project will be expanded in the 2005 budget. Up to 8 wells per section could be drilled as economics dictate.
Three other development wells will be drilled in the third quarter to delineate existing assets. These wells were scheduled for summer drilling but weather and land issues had delayed drilling.
During the remainder of the year management will focus on exploiting the existing assets through infill drilling, re-completions and sourcing a third party (s) to assist with the Pincher Creek drilling.
The highlights below outline the financial and operating results of the first quarter of 2004 compared to the first quarter of 2003. Attached are the financial statements themselves and a management discussion and analysis. The notes will be available on Sedar and on our web site at www.choiceresources.ca.