Q1 2008 results: revenues climb 25% and net earnings jump 83.3%
Thu May 15, 3:54 PMTSX: PBC
MONTREAL, May 15 /CNW Telbec/ - Pebercan Inc. (the "Company") (TSX: PBC.TO) today unveiled its results for the first quarter ended March 31, 2008. All amounts are in U.S. dollars.
Highlights:
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First quarter 2008 results (compared with Q1 2007)
- Revenues up 25% to $33.54 million
- Net earnings climb 83.3% to $12.10 million
- Cash flow increases to $23,84 million (from $22,86 million at the end
of Q1 2007)
- Total production reaches 1,782,591 barrels (19,589 bbl/d)
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2008 2007
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In thousands (except for figures per share
and number of wells) Q1 Q1
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Gross oil sales ($) 33,540 26,830
Drilling services ($) 319
Total revenues ($) 33,540 27,149
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Net earnings ($) 12,105 6,604
Net earnings per share:
- basic ($) 0.16 0.09
- diluted ($) 0.16 0.09
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Cash flow before non-cash items(1) ($) 23,841 22,857
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Total production: Block 7
(in barrels) 1,783 1,765
Pebercan's proportionate share
(in barrels) 651 839
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Number of wells in production (end of period) 40(3) 39 (2)
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(1) See "Non-GAAP Measures."
(2) Excluding two wells temporarily shut down on Canasi (Canasi 4 since
February 2004 and Canasi 2 since November 2004).
(3) Excluding two wells temporarily shut down on Canasi, one on Seboruco,
three on Santa Cruz, and CAS-100, which is awaiting completion.
- Activities and results for Q1 2008
The year-over-year increase in oil sales in the first quarter stems
primarily from the higher sales price of a barrel of crude due to an increase
in the oil index. Revenues rose 25% despite the decrease in Pebercan's
proportionate share.
The sales price of crude oil surged 61.21%, from $31.97/barrel in the
first quarter of 2007 to $51.54/barrel in the first quarter of 2008.
Block 7 production in the first quarter was 1,782,591 barrels (19,589
bbl/d), compared with 1,765,457 barrels at the same time last year
(19,616 bbl/d). Pebercan's net share of this production was 650,699 (7,151
bbl/d), versus 839,157 in the first quarter of 2007 (9,324 bbl/d).
First quarter revenues from oil sales were up 25% to $33,540,000, as
against $26,830,000 in the first quarter of 2007.
In 2007, first quarter revenue included $319,000 of drilling income. This
activity was discontinued in March 2007 and as such, no drilling income was
recorded in the first quarter of 2008.
First quarter net earnings were up 83.3% to $12,105,000 ($0.16 per share,
basic), compared with $6,604,000 a year earlier.
Depletion of oil properties
For the quarter ended March 31 2008 2007 %
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Depletion ($000) 11,042 13,301 -17.0%
$/barrel 16.97 15.85 7.1%
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Depletion of oil properties is calculated based on annual production, past
exploration and development investments after depletion of proved reserves
plus the estimated investments required to finish developing proved but as yet
undeveloped reserves, the whole divided by the total proved reserves as
determined by an independent appraiser. Proved reserves fluctuate based on new
discoveries made during the year and on annual production levels.
The 7.1% increase in the depletion charge per barrel is mainly
attributable to a decrease (vs. 2007) in past and future investments as well
as a substantial drop in Pebercan's proportionate share per barrel.
- Consolidated gross profit up
After taking into account the average sales price and the production costs
described above, gross profit from oil production was up 71% in the first
quarter to $18,156,000 ($27.90 per barrel), compared with $10,616,000 ($12.65
per barrel) a year earlier.
$/barrel
For the quarter ended March 31 2008 2007
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Gross sales price 51.54 31.97
Production cost (6.67) (3.47)
Depletion of oil properties (16.97) (15.85)
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Gross profit from oil production 27.90 12.65
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- Financial position
As at March 31, 2008, the Company had $31,741,000 in cash. At the end of
the first quarter, working capital was $120,561,000 with a ratio of 13.5 and
shareholder's equity stood at $214,049,000. Pebercan still has no long-term
debt and finances its projects out of working capital.
Under the sales contract signed between Peberco and Cupet on December 31,
2003, revenues from oil sales are payable 90 days after the month in which the
oil is produced.
However, since Cupet was late in making its payments in 2007, the Company
renegotiated three agreements to reschedule the debt, the last of which
provides for a payment of (Pebercan's part) $144.5 million between November 4,
2007 and December 31, 2008. In exchange for this new agreement, Pebercan
obtained a guarantee from the Banco Nacional de Cuba for $66.3 million of the
total payment due during that period. Pursuant to this new agreement, Pebercan
collected $7 million in November and December 2007, and on the date hereof, an
additional $31.5 million had been received since January 1, 2008.
In thousands of $ March 31, December 31,
(except for working capital ratio) 2008 2007
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Cash ($) 31 741 21 741
Working capital ($) 120 561 103 511
Working capital ratio 13.5 9.3
Oil and gas properties ($) 131 366 135 565
Total assets ($) 262 364 252 376
Shareholders' equity ($) 214 049 201 938
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- Drilling, exploration and development activities
Santa-Cruz
In the first quarter, after well STC-305 was completed on January 11,
2008, with an initial production of 881 bbl/d, drilling was voluntarily
suspended on this field, possibly until July 2008.
The geoscience studies aimed at gaining a better understanding of the
deposit's geological makeup and optimizing the techniques used to develop the
field progressed according to the plan devised at the end of 2007.
The planned maintenance work began during the first quarter on wells
STC-100, STC-104 and STC-200.
At the end of June or in early July, the Company and its partner will
re-evaluate additional drilling opportunities on Santa Cruz.
Canasi
Production from the Canasi-100 well was delayed due to Cupet inspections
of the Puerto-Escondido processing facilities through which the well's
production flows. A work program developed and approved by Block 7's partners
was launched in April 2008.
The Can-2 well was brought back on stream following a water isolation
operation, which reduced the amount of water from 100% to 50%.
Seboruco
In the first quarter, the partners signed off on the Seb-160 infill well.
Drilling is scheduled to begin in the second quarter of 2008.
- Investments:
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During the first quarter of 2008, Pebercan spent $6,844,000 ($13,955,000
in Q1 2007) on exploration and development activities.
- Outlook:
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Management intends to continue developing its concessions in Cuba, i.e.
the Canasi, Seboruco and Santa Cruz fields.
This strategy seeks to optimize exploitation, offset the natural decline
in production and confirm new reserves in an effort to maintain high
production levels over the long term.
Pebercan is also on the lookout for opportunities to diversify its oil and
gas exploration, development and exploitation activities outside Cuba.
Pebercan's interim consolidated financial statements and management report
for the period ended March 31, 2008 are available on our Web site at
www.pebercan.com, as well as on SEDAR at www.sedar.com.
Pebercan is involved in the exploration, development and exploitation of
oil reserves in the Republic of Cuba. Pebercan sells its entire production to
the Cuban government but is not bound by any restrictions regarding the sale
of its oil. The Company's shares are listed on the TSX and trade under the
symbol PBC.
Legal Notice - Forward-Looking Statements
Forward-looking statements contained in this press release involve known
and unknown risks, uncertainties or other factors that may cause actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Pebercan disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Important additional
information identifying risks and uncertainties is contained in the Company's
most recent annual and interim reports and forms filed with the applicable
Canadian securities regulatory authorities.
ContactsPEBERCAN Inc.: Christophe Ranger cranger@pebercan.com
(514) 286-5200
Fax: (514) 286-5177 RENMARK Financial Communications Inc.: Henri Perron
hperron@renmarkfinancial.com Dan Symons
dsymons@renmarkfinancial.com (514) 939-3989
Fax: (514) 939-3717 www.renmarkfinancial.com
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