2008 second quarter results: Revenues increase 33.33%, net earnings increase 20.8% - Total production up 4.8%
Fri Aug 15, 1:01 PMTSX: PBC
MONTREAL, Aug. 15 /CNW Telbec/ - Pebercan Inc. (the "Company") (TSX: PBC.TO) today announced its results for the second quarter ended June 30, 2008. All amounts in this press release are in U.S. dollars.
Highlights
----------
2008 second quarter results (compared with the second quarter of 2007)
- Net earnings increased 20.8% to $13,244,000 ($0.18 per share, basic and
diluted).
- Total production from Block 7 increased 4.8% to 1,820,569 barrels
(20,006 barrels/day).
- Pebercan's net share of total production from Block 7 reached
569,883 barrels (6,262 barrels/day), down 13%.(1)
- Cash flows generated by operating activities were $22,902,000 but late
payments continue.
- Forty-three wells in production as at June 30, 2008: 10 on Canasi;
20 on Seboruco; and 13 on Santa Cruz.
Outlook
-------
Management intends to continue enhancing its concessions in the Republic
of Cuba. It also plans to further develop the Canasi, Seboruco, and Santa Cruz
deposits so as to:
- optimize operations;
- offset the natural decline in production; and
- confirm new reserves in order to maintain high production levels over
the long term.
Financial Highlights
--------------------
-------------------------------------------------
Quarters ended Six months ended
June 30 June 30
-------------------------------------------------------------------------
In thousands (except for
figures per share and
number of wells) 2008 2007 2008 2007
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Gross oil sales ($) 35,468 26,605 69,008 53,435
-------------------------------------------------------------------------
Drilling services ($) -133 186
-------------------------------------------------------------------------
Total revenues ($) 35,468 26,472 69,008 53,621
-------------------------------------------------------------------------
Net earnings ($) 13,244 10,968 25,349 17,572
-------------------------------------------------------------------------
Net earnings per
share: basic ($) 0.18 0.15 0.34 0.24
-------------------------------------------------------------------------
Net earnings per
share: diluted ($) 0.18 0.14 0.34 0.23
-------------------------------------------------------------------------
Cash flow before
non-cash items ($) (b) 22,902 19,321 46,743 42,178
-------------------------------------------------------------------------
Cash flow per
share before
non-cash items ($)
-------------------------------------------------------------------------
Gross selling
price of oil ($) 62.24 40.62 56.54 35.76
-------------------------------------------------------------------------
Total production :
Block 7 (in thousands
of barrels) 1,821 1,737 3,603 3,503
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Pebercan's
proportionate share
(in thousands of
barrels) 570 655 1,220 1,494
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Number of wells in
production
(end of period) 43(c) 41(a) 43(c) 41(a)
-------------------------------------------------------------------------
Weighted average
number of shares
outstanding:
-------------------------------------------------------------------------
Basic 74,583,335 74,497,016 74,583,335 74,378,169
-------------------------------------------------------------------------
Diluted 75,629,240 75,699,089 75,544,354 75,639,841
-------------------------------------------------------------------------
-------------------------------------------------------------------------
a) Excluding wells temporarily shut down on Canasi (four since
February 2004, and two since November 2004).
b) Refer to the note "Non-GAAP Measures."
c) Excluding the shut down wells: Seb 150, STC 202, Can 4, and Can 100
-------------------------------------------------------------------------
As at
In thousands of $ As at June December
(except working capital ratio) 30, 2008 31, 2007
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cash 27,576 21,741
-------------------------------------------------------------------------
Working capital 136,116 103,511
-------------------------------------------------------------------------
Working capital ratio 21.1 9.3
-------------------------------------------------------------------------
Oil and gas properties 129,043 135,565
-------------------------------------------------------------------------
Total assets 272,687 252,376
-------------------------------------------------------------------------
Shareholders' equity 227,299 201,938
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2008 Second Quarter Results
---------------------------
Total production from Block 7 was up 4.8% to 1,820,569 barrels
(20,006 barrels/day), compared with 1,737,184 barrels (19,090 barrels/day) in
the second quarter of 2007.
Pebercan's net share of total Block 7 production was 569,883 barrels
(6,262 barrels/day), down 13% from the 655,022 barrels recorded in the second
quarter of 2007 (7,198 barrels/day). The decrease is explained by the increase
in Profit Oil, on which the Company's percentage share is lower than its cost
recovery.
In the quarter ended June 30, 2008, Pebercan's revenues increased 33.3% to
reach $35,468,000 compared with $26,472,000 for the same quarter in 2007.
These revenues consist of revenues derived from oil sales. The significant
increase in these revenues is largely explained by the surge in the price per
barrel which rose from $40.62/barrel in the second quarter of 2007 to
$62.24/barrel in the second quarter of 2008. It should also be noted that oil
sales in the second quarter of 2007 were $26,605,000, from which $133,000 was
deducted after Pebercan ceased its drilling activities in early 2007.
It should be noted that Pebercan's revenues increased despite the terms of
the sales agreement renegotiated with Cupet, whereby the discounts rose from
18% and 19% to 26% and 27% respectively.
In the second quarter of 2008, gross profit from oil production was
$22,232,000 ($39.01/barrel) up 90.88% from $11,647,000 ($17.78/barrel) in the
second quarter of 2007.
Pebercan recorded net earnings of $13,244,000 ($0.18 per share, basic and
diluted), compared with $10,968,000 ($0.15 per share, basic, and $0.14 per
share, diluted) a year earlier, an increase of 20.8%.
The increase in net earnings is mainly the result of the increase in
international oil indices.
Finally, it should be noted that the gross profit recorded in the second
quarter of 2007 reflected a $1,971,000 gain on the disposal of drilling
equipment sold in April 2007.
Results for the First Half of 2008
----------------------------------
For the first half of 2008, total production from Block 7 was
3,603,168 barrels (19,798 barrels/day), compared with 3,502,641 barrels
(19,245 barrels/day) for the same period last year, an increase of 2.9%.
For the same period, Pebercan's net share of the total production from
Block 7 was 1,220,582 barrels, compared with 1,494,179 barrels in the first
half of 2007, a decrease of 18.31%.
Pebercan's proportionate share for the six-month period ended June 30,
2008 was 34%, compared with 43% for the same period in 2007.
The decrease in Pebercan's net share, and consequently, its proportionate
share, is explained by the increase in profit oil, on which Pebercan's
production share is lower than on cost recovery.
For the first half of 2008, Pebercan's revenues derived from oil sales
increased 29.1% to reach $69,008,000 from $53,435,000 recorded in the first
half of 2007. This increase is primarily explained by a significant increase
in the selling price of oil which rose 58.1%, from $35.76/barrel at the end of
June 2007 to $56.54/barrel as at June 30, 2008.
In fact, the increase is significant, despite the terms of the sales
agreement renegotiated with Cupet, whereby the discounts increased from 18%
and 19% to 26% and 27% respectively.
For the first half of 2008, Pebercan's net earnings totalled $25,349,000
($0.34 per share, basic and diluted), compared with $17,572,000 ($0.24 per
share, basic, and $0.23 per share, diluted) for the first half of 2007, an
increase of 44.1%. The increase is mainly the result of the increase in the
selling price of oil.
Financial Position
------------------
As at June 30, 2008, Pebercan had $27,576,000 in cash and high working
capital, which was $136,116,000 compared with $103,511,000 at the end of the
previous fiscal year.
Late payments by CUPET have not been settled to date despite ongoing
negotiations with the authorities. The due dates of the last four months
(April 2008 to July 2008) provided for in the last debt rescheduling agreement
were not honoured, except for a $2 million payment (for the partners).
Investments
-----------
In the second quarter of 2008, expenses for exploration and development
work on oil properties totalled $7,390,000 ($10,093,000 in the second quarter
of 2007).
In the first quarter of 2008, expenses for exploration and development
work on oil properties totalled $14,234,000 ($24,048,000 in the first quarter
of 2007).
In the first half of 2008, Pebercan finished drilling well STC-305,
drilled well Seb-160 and performed workovers on Can-100, Can-2, STC-100,
STC-104, STC-200 and STC-103. At the end of the first half of the year, 43
wells were in production: 10 on Canasi; 20 on Seboruco; and, 13 on Santa Cruz.
Pebercan's interim consolidated financial statements and Management's
Report for the period ended June 30, 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 all of its 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.
----------------------------------
(1) This is explained by the increase in the level of profit oil, on
which the Company's percentage share is lower than on cost recovery
ContactsRENMARK Financial Communications Inc.: Henri Perron: hperron@renmarkfinancial.com Dan Symons: dsymons@renmarkfinancial.com (514) 939-3989
Fax: (514) 939-3717
www.renmarkfinancial.com PEBERCAN Inc.: Christophe Ranger
cranger@pebercan.com
(514) 286-5200
Fax: (514) 286-5177
684.33 (7.38%)