Mr. Steve Sugianto reports
GALLEON ANNOUNCES Q2 2010 FINANCIAL AND OPERATIONAL RESULTS
Galleon Energy Inc. has released its second quarter 2010 financial and operational results. Additional information including unaudited consolidated financial statements, notes, and management's discussion and analysis may be viewed on the company's website or on SEDAR.
Second quarter 2010 highlights:
-
The company drilled and cased for production 14 (13.5 net) wells in second quarter 2010
resulting in nine (8.5 net) natural gas wells and four (four net) oil wells,
for a success rate of 93 per cent.
- Revenues of $55.3-million (65 cents per share) and funds flow from operations
of $27.1-million (32 cents per share) were generated from average production of
16,222 barrels of oil equivalent per day (70 per cent gas and 30 per cent oil and natural gasa liquids), which included 85 days of
production from Puskwa.
- Operating expenses averaged $9.03 per boe and the operating netback was
$23.67 per boe.
- Earnings of $2.3-million (three cents per share) were recorded.
- Exploration and development capital expenditures of $22.8-million were
incurred and net proceeds after costs from property dispositions were
$130.9-million.
- At June 30, 2010, net debt was $115.8-million comprising $111.7-million in bank debt and a working capital deficiency of $4.1-million.
Credit facilities of $250-million are available to the corporation.
To June 30, 2010, revenues of $117.6-million ($1.38 per share) and funds flow from operations of $58.8-million (69 cents per share) were generated from 15,928 boe/d (69 per cent natural gas and 31 per cent oil and NGLs). Operating expenses have averaged $8.95 per boe in 2010. Earnings of $14.8-million (17 cents per share) were recorded in 2010.
Galleon completed the sale of the majority of its interests in the Puskwa property on June 25, 2010, to a third party for cash proceeds of $133.6-million after adjustments. The corporation is well positioned to develop its existing properties, to identify new opportunities and to realize future value for shareholders.
Current production for the week ended Aug. 7, 2010, is approximately 13,850 boe/d based on field report estimates. In addition, there is approximately 500 boe/d waiting on tie-in and 900 shut-in boe/d waiting upon regulatory approvals. Expansion of the Kakut oil battery is expected to be completed by Aug. 31, 2010. Capital expenditures during the second half of 2010 will be allocated 80 per cent toward moving reserves from probable to proven and from proven to proven producing. Currently, there are three rigs drilling.
FINANCIAL AND OPERATING HIGHLIGHTS
($000s, except per unit data)
Three months ended Six months ended
June 30, June 30,
2010 2009 2010 2009
Financial
Revenue before royalties and
financial derivatives $55,273 $50,373 $117,557 $107,360
Funds flow from operations 27,146 29,605 58,826 55,755
Per share -- basic 0.32 0.39 0.69 0.74
Per share -- diluted 0.32 0.39 0.69 0.74
Net income (loss) 2,328 (22,012) 14,819 (27,103)
Per share -- basic 0.03 (0.29) 0.17 (0.36)
Per share -- diluted 0.03 (0.29) 0.17 (0.36)
Capital expenditures --
exploration and development 22,788 19,619 61,663 50,010
Total assets 1,010,855 1,141,506 1,010,855 1,141,506
Net debt 115,844 233,225 115,844 233,225
Operating
Average daily production
Light oil (bbl/d) 3,295 4,024 3,272 4,235
Heavy oil (bbl/d) 1,108 1,198 1,135 1,212
NGL (bbl/d) 537 565 532 625
Natural gas (mcf/d) 67,689 61,733 65,937 65,660
Total (boe/d) 16,222 16,076 15,928 17,016
Average selling prices
Light oil ($/bbl) 72.53 61.39 74.95 54.15
Heavy oil ($/bbl) 57.76 51.54 61.43 42.54
NGL ($/bbl) 53.41 39.23 55.09 36.41
Natural gas ($/mcf) 4.07 3.61 4.63 4.41
Total ($ per boe) 37.44 34.43 40.78 34.86
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS), COMPREHENSIVE INCOME (LOSS)
AND RETAINED EARNINGS
($000s, except per share data)
Three months ended Six months ended
June 30, June 30,
2010 2009 2010 2009
Revenue
Petroleum and natural gas
revenue $55,273 $50,373 $117,557 $107,360
Royalties, net of GCA (9,915) (3,083) (20,597) (13,435)
Realized gain on financial
derivative 5,329 3,774 6,764 8,111
Unrealized gain (loss) on
financial derivative (952) (24,999) 17,577 (20,308)
Other income - 74 - 746
-------- -------- -------- --------
49,735 26,139 121,301 82,474
Expenses
Operating 13,328 13,790 25,815 31,087
Transportation 2,422 2,056 4,611 4,398
General and administration 3,063 3,827 6,631 8,028
Restructuring costs 1,183 - 1,183 -
Goodwill allocated to
disposition of properties 4,736 - 4,736 -
Interest 3,578 1,702 6,592 3,287
Stock-based compensation 1,324 1,290 2,702 2,569
Accretion 723 664 1,437 1,323
Depletion and depreciation 32,793 32,259 63,524 67,789
-------- -------- -------- --------
63,150 55,588 117,231 118,481
Earnings (loss) before taxes (13,415) (29,449) 4,070 (36,007)
Income taxes
Capital and other taxes (33) 158 66 227
Future income tax recovery (15,710) (7,595) (10,815) (9,131)
-------- -------- -------- --------
(15,743) (7,437) (10,749) (8,904)
Net earnings (loss) and
comprehensive income (loss) 2,328 (22,012) 14,819 (27,103)
-------- -------- -------- --------
Retained earnings, beginning
of period 97,136 114,126 84,645 119,217
-------- -------- -------- --------
Retained earnings, end of
period 99,464 92,114 99,464 92,114
======== ======== ======== ========
Net earnings (loss)
and comprehensive
income (loss) per share
Basic 0.03 (0.29) 0.17 (0.36)
Diluted 0.03 (0.29) 0.17 (0.36)
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