Paramount Resources Ltd. Financial and Operating Results for the Three Months Ended March 31, 2008
08 Mai 2008 - 12:23AM
Marketwired Canada
Paramount Resources Ltd. (TSX:POU) ("Paramount" or the "Company") announces its
financial and operating results for the three months ended March 31, 2008.
FINANCIAL AND OPERATING HIGHLIGHTS (1)
($ millions, except as noted)
March 31, December 31, Change%
Three Months Ended 2008 2007
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Financial
Petroleum and natural gas sales 77.0 61.8 25
Funds flow from operations (2) 24.2 22.9 6
Per share - diluted ($/share) 0.36 0.33 9
Net loss (38.0) (156.5) 76
Per share - diluted ($/share) (0.56) (2.29) 76
Capital expenditures 64.1 68.9 (7)
Long-term investments (3) 386.2 322.1 20
Total assets 1,217.0 1,299.8 (6)
Net debt (4) 98.2 15.9 (518)
Common shares outstanding
(thousands) 67,693 67,681 -
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Operating
Sales volumes:
Natural gas (MMcf/d) 65.8 67.6 (3)
Oil and NGLs (Bbl/d) 3,811 2,984 28
Total (Boe/d) 14,775 14,248 4
Gas weighting 74% 79% (5)
Total wells drilled (gross) 28 42 (33)
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(1) Readers are referred to the advisories concerning non-GAAP measures and
barrels of oil equivalent conversions under the heading "Advisories" in
this document.
(2) The three months ended December 31, 2007 includes a reclassification of
$4.9 million for a foreign exchange collar to conform to the current
year presentation.
(3) Based on the period-end closing prices of Trilogy Energy Trust units and
MGM Energy Corp. shares on the Toronto Stock Exchange, NuLoch Resources
Inc. shares on TSX Venture Exchange and book value of the remaining
long-term investments.
(4) Net debt is a non-GAAP measure, it is calculated and defined in the
Liquidity and Capital Resources section of Management's Discussion and
Analysis.
Significant Events
Principal Properties
Paramount continued to focus on the major properties within each Corporate
Operating Unit, including development opportunities in the United States.
- Increased Kaybob's daily production by 11 percent from the fourth quarter of 2007.
- Drilled four (3.0 net) wells in North Dakota in addition to two (0.5 net)
wells in Montana, furthering Southern's light oil program.
- Sold non-core facilities and properties within Northern for $6.4 million,
including $5.0 million for the Maxhamish facility and pipeline.
Strategic Investments
Paramount increased its portfolio of Strategic Investments.
- Invested $13.7 million in 1.9 million units of Trilogy Energy Trust
("Trilogy") and participated in Trilogy's distribution reinvestment plan,
acquiring an additional 0.5 million units, increasing Paramount's holdings to
21.1 percent at March 31, 2008.
- Invested $6.0 million to acquire 6.1 million Class A common of NuLoch
Resources Inc, a public oil and gas company with properties in Alberta and
Saskatchewan.
- Purchased 3.5 million common shares of Paxton Corporation, a private company
involved in greenhouse gas technology, for $4.8 million.
Corporate
Paramount continued to reduce long-term debt and completed its Normal Course
Issuer Bid ("NCIB") program.
- Purchased US$45.0 million of US Senior Notes.
- Lowered interest expense to $2.7 million from $11.5 million in the first
quarter of 2007.
- Purchased an additional 6,400 Common Shares under the NCIB, resulting in a
total of 3.3 million Common Shares being purchased and cancelled.
Outlook
Paramount's first quarter production of 14,775 Boe/d is consistent with
expectations. Paramount forecasts it will achieve average production of 15,000
to 15,250 Boe/d for 2008. The 2008 exploration and development budget of $130
million excluding land purchases remains unchanged.
ADDITIONAL INFORMATION
A copy of Paramount's complete results for the three months ended March 31,
2008, including Management's Discussion and Analysis and Unaudited Interim
Consolidated Financial Statements can be obtained at
http://media3.marketwire.com/docs/507pou.pdf. This report will also be made
available through Paramount's website at www.paramountres.com and SEDAR at
www.sedar.com.
ABOUT PARAMOUNT
Paramount is a Canadian oil and natural gas exploration, development and
production company with operations focused in Western Canada. Paramount's common
shares are listed on the Toronto Stock Exchange under the symbol "POU".
ADVISORIES
NON-GAAP MEASURES
In this document, Paramount uses the term "funds flow from operations", "funds
flow from operations per share - diluted" and "net debt", collectively the
"Non-GAAP measures", as indicators of Paramount's financial performance. The
Non-GAAP measures do not have standardized meanings prescribed by GAAP and,
therefore, are unlikely to be comparable to similar measures presented by other
issuers. "Funds flow from operations" is commonly used in the oil and gas
industry to assist management and investors in measuring the Company's ability
to finance capital programs and meet financial obligations, and refers to cash
flows from operating activities before net changes in operating working capital.
"Funds flow from operations" includes distributions and dividends received on
securities held by Paramount. The most directly comparable measure to "funds
flow from operations" calculated in accordance with GAAP is cash flows from
operating activities. "Funds flow from operations" can be reconciled to cash
flows from operating activities by adding (deducting) the net change in
operating working capital as shown in the consolidated statements of cash flows.
"Net debt" is calculated and defined in the Liquidity and Capital Resource
section of Paramount's Management's Discussion and Analysis. Management of
Paramount believes that the Non-GAAP measures provide useful information to
investors as indicative measures of performance.
Investors are cautioned that the Non-GAAP Measures should not be considered in
isolation or construed as alternatives to their most directly comparable measure
calculated in accordance with GAAP, as set forth above, or other measures of
financial performance calculated in accordance with GAAP.
FORWARD-LOOKING INFORMATION
Certain statements included in this document constitute forward-looking
statements or information under applicable securities legislation.
Forward-looking statements or information typically contain statements with
words such as "anticipate", "believe", "expect", "plan", "intend", "estimate",
"propose", or similar words suggesting future outcomes or statements regarding
an outlook. Forward-looking statements or information in this document include,
but are not limited to: business strategies and objectives, capital
expenditures, reserve quantities and the undiscounted and discounted present
value of future net revenues from such reserves, anticipated tax liabilities,
future production levels, exploration and development plans and the timing
thereof, abandonment and reclamation plans and costs, acquisition and
disposition plans, operating and other costs and royalty rates.
Such forward-looking statements or information are based on a number of
assumptions which may prove to be incorrect. The following assumptions have been
made, in addition to any other assumptions identified in this document:
- the ability of Paramount to obtain required capital to finance its
exploration, development and operations;
- the ability of Paramount to obtain equipment, services and supplies in a
timely manner to carry out its activities;
- the ability of Paramount to market its oil and natural gas successfully to
current and new customers;
- the timing and costs of pipeline and storage facility construction and
expansion and the ability of Paramount to secure adequate product
transportation;
- the ability of Paramount and its industry partners to obtain drilling success
consistent with expectations;
- the timely receipt of required regulatory approvals;
- currency, exchange and interest rates; and
- future oil and gas prices.
Although Paramount believes that the expectations reflected in such
forward-looking statements or information are reasonable, undue reliance should
not be placed on forward-looking statements because Paramount can give no
assurance that such expectations will prove to be correct. Forward-looking
statements or information are based on current expectations, estimates and
projections that involve a number of risks and uncertainties which could cause
actual results to differ materially from those anticipated by Paramount and
described in the forward-looking statements or information. These risks and
uncertainties include but are not limited to:
- the ability of Paramount's management to execute its business plan;
- the risks of the oil and gas industry, such as operational risks in exploring
for, developing and producing crude oil and natural gas and market demand for
oil and gas;
- the ability of Paramount to obtain required capital to finance its
exploration, development and operations and the adequacy and costs of such
capital;
- fluctuations in oil and gas prices, foreign currency exchange rates and
interest rates;
- risks and uncertainties involving the geology of oil and gas deposits;
- risks inherent in Paramount's marketing operations, including credit risk;
- the uncertainty of reserves estimates and reserves life;
- the value and liquidity of Paramount's investments in other entities and the
returns on such investments;
- the uncertainty of estimates and projections relating to exploration and
development costs and expenses;
- the uncertainty of estimates and projections relating to future production and
the results of exploration, development and drilling;
- potential delays or changes in plans with respect to exploration or
development projects or capital expenditures;
- the availability of future growth prospects and Paramount's expected financial
requirements;
- Paramount's ability to obtain equipment, services, supplies and personnel in a
timely manner to carry out its activities;
- Paramount's ability to enter into or continue leases;
- health, safety and environmental risks;
- Paramount's ability to secure adequate product transportation and storage;
- imprecision in estimates of product sales and the anticipated revenues from
such sales;
- the ability of Paramount to add production and reserves through development
and exploration activities;
- weather conditions;
- the possibility that government laws, regulations or policies may change or
governmental approvals may be delayed or withheld;
- uncertainty in amounts and timing of royalty payments and changes to royalty
regimes and government regulations regarding royalty payments;
- changes in taxation laws and regulations and the interpretation thereof;
- changes in environmental laws and regulations and the interpretation thereof;
- the cost of future abandonment activities and site restoration;
- the ability to obtain necessary regulatory approvals;
- risks associated with existing and potential future law suits and regulatory
actions against Paramount;
- uncertainty regarding aboriginal land claims and co-existing with local
populations;
- loss of the services of any of Paramount's executive officers or key employees;
- the impact of market competition;
- general economic and business conditions; and
- other risks and uncertainties described elsewhere in this document or in
Paramount's other filings with Canadian securities authorities and the United
States Securities and Exchange Commission.
The forward-looking statements or information contained in this news release are
made as of the date hereof and Paramount undertakes no obligation to update
publicly or revise any forward-looking statements or information, whether as a
result of new information, future events or otherwise, unless so required by
applicable securities laws.
OIL AND GAS ADVISORY
This news release contains disclosure expressed as "Boe" and "Boe/d" All oil and
natural gas equivalency volumes have been derived using the ratio of six
thousand cubic feet of natural gas to one barrel of oil. Equivalency measures
may be misleading, particularly if used in isolation. A conversion ratio of six
thousand cubic feet of natural gas to one barrel of oil is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the well head.
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