Centurion Reports Q3 2004 Results

Centurion Energy International Inc. (TSX: CUX) reports the financial results of the Company for the nine months ending September 30, 2004.

The third quarter was highlighted by three exploration and development successes in Egypt. The Gelgel 2,3,& 4 wells tested at combined rates of 59 mmcf/day of dry gas. Gelgel-2 was tied in and started producing just before quarter end. Gelgel 3 commenced production in late October and Gelgel 4 is completed and is expected to commence production by year end when additional compression equipment is installed.

The drilling success achieved to date in Egypt has advanced Centurion closer to its target of exiting 2005 at a combined production level of 250 mmcf/day from its El Wastani and South Manzala production leases located in the Nile delta.

Centurion has had 100% drilling success on the first 4 wells in its 2004/05 Egyptian drilling program. This has given the company a high level of confidence in its interpretation of its 3D seismic data as the company embarks on the remaining 17 wells planned between now and the end of 2005.

The next well in the program, El Wastani East-2, spudded on October 29 and will be followed immediately by El Wastani 4. A second drilling rig is being mobilized to drill the Abu Monkar-2 and Zidan wells in the South Manzala area. The first of these wells is expected to spud in early December, 2004.

Production totaled 1,091,000 boe in Q3 2004 (averaged 11,858 boepd) including 932,000 boe (10,130 boepd) in Egypt and 159,000 boe (1,728 boepd) in Tunisia. Q3 2004 production figures do not include the full impact of the discoveries made in the quarter as the Gelgel-2 well was not tied in until late in the quarter. Centurion's current net production is approximately 15,000 boepd.

Cashflow from operations for Q3 2004 was $12,898,000 ($0.16 per share basic and $0.15 per share diluted) compared to $4,437,000 ($0.07 per share basic and diluted) for Q3 2003. Cashflow for the nine months ended September 30, 2004 was $30,551,000 ($0.40 per share basic and $0.38 per share diluted) compared to $21,201,000 ($0.34 per share basic and $0.33 per share diluted) for the nine months ended September 30, 2003.

Earnings for Q3 2004 were $3,856,000 ($0.05 per share basic and diluted) compared to $716,000 ($0.01 per share basic and diluted) for Q3 2003. Earnings for the nine months ended September 30, 2004 were $9,687,000 ($0.13 per share basic and $0.12 per share diluted) compared to $7,017,000 (0.11 per share basic and diluted) for the nine months ended September 30, 2003.

Dilution Impact

When a company issues new shares to fund new investments, as is the case with the October 2003 and August 2004 stock issues Centurion completed, a short term impact is dilution of period results until the cash flow and earnings from the new investments start to be reflected. Dilution associated with these stock issues decreased cashflow and earnings for the nine months ended September 30, 2004 by $0.07 and $0.03 per share respectively.

Effects of Currency Value Changes

Centurion's operations are conducted in geographic areas where the US dollar is the functional business currency. All of Centurion's revenues are paid in US funds and the majority of its operating expenses and capital expenditures are also US dollar based. As the Canadian dollar has strengthened considerably in 2004, all of Centurion's US dollar based revenues and expenses will be translated into fewer equivalent Canadian dollars than the comparable translated amounts in 2003. There has been an approximate year to date decrease of 8% in all US dollar based amounts being reported in Canadian dollars in 2004. Accordingly, earnings and cashflow for the three month period ending September 30, 2004 have been reduced by less than $0.01 per share and earnings and cashflow for the nine month period ending September 30, 2004 have been reduced by approximately $0.01 and $0.03 per share respectively compared to what they would have been if the 2004 average exchange rate had remained the same as the average rate for 2003.

Change in Production Mix

Throughout 2004, Centurion's production mix has changed from oil to gas. The proportion of natural gas income with lower netbacks realized has increased with the result that there is not a barrel for barrel increase in cash flow and earnings for the significant increase in daily production rates. Centurion's successful drilling program in Egypt for natural gas and condensate has replaced short life, high netback oil reserves with much longer life natural gas reserves, albeit with lower netbacks. The gas reserves are expected to ultimately provide a greater contribution to overall shareholder value.

OPERATING HIGHLIGHTS

EGYPT

El-Manzala Concession

El Wastani Development Lease

On July 5, 2004, production commenced from the El Wastani-3 exploration well drilled in the second quarter. The stable production rate averaged approximately 10mmcf/day of natural gas and 300 bpd of condensate during the quarter.

The El Wastani field produced an average of 17.7 mmcf/day of sales gas and 893 bopd of condensate and LPG's during Q3 2004 compared to 10.4 mmcf/day, and 616 bopd of condensate and LPG's during Q3 2003.

On October 29, the El Wastani East-2 exploration well was spudded and is currently at an approximate depth of 2,000 meters. This well will be drilled to a total depth of approximately 3,000 meters targeting the same Abu Madi sands encountered in El Wastani 1 & 3 and East El Wastani 1. Drilling is expected to take 35 days with completion activities to follow. After El Wastani East-2 drilling is finished, the drilling rig will mobilize to the El Wastani-4 location to commence a multi-well development drilling program in the El Wastani field.

Centurion has also initiated engineering and procurement work for the construction of a company-owned gas plant in the El Wastani area. Centurion currently processes all of its gas at the nearby Abu Madi gas plant paying a third party processing fee. The new plant will be built to accommodate all of Centurion's projected production in the area and is expected to be operational by the end of 2005.

South Manzala Development Lease

Production from the South Manzala field average 34.7 mmcf/day during Q3 2004. There was minimal production associated with the Gelgel-2 discovery in Q3, 2004 as the well was tied-in just before quarter end. Gelgel 3 is completed and has now commenced production and it is expected that production from Gelgel 4 will commence in late December when additional compression equipment is installed.

West Gharib Concession

Hana Field

Production from the Hana field averaged 507 bopd during Q3 2004 compared to 431 bopd during Q3 2003. A three well drilling program has been approved by the partners for the West Gharib concession, including one development well in the Hana field and two exploration wells located in unexplored areas of the concession.

West Manzala and West Qantara

Exploration Blocks in Egypt

As previously reported, Centurion has been awarded two exploration blocks in the Nile delta; West Manzala and West Qantara which cover 800,000 acres on trend with and surrounding the Company's existing El Wastani and South Manzala development leases. Centurion's working interest in the two awarded blocks is 75%.

Preliminary exploration work has commenced on these blocks and a 3D seismic program is being scheduled. Centurion has already targeted 38 exploration prospects based on 2D seismic data interpretation of the area. Centurion and its partner will be drilling a minimum of 5 wells in these new concessions in the upcoming 2 years.

Kom Ombo Concession

The Egyptian parliament ratified the Southern Egypt Block 2 during Q1 2004. The block covers approximately 5.6 million acres in the Kom Ombo rift Basin. The geology in this basin is analogous to the prolific Muglad Basin in southern Sudan. Centurion has committed to spend US $2.0 million in the first phase of exploration. Plans are to reprocess 2D seismic, conduct additional geological and geochemical studies and drill one exploration well. Seismic reprocessing and geological field work are anticipated to commence in Q4, 2004.

TUNISIA

Ezzaouia Drilling Program

The Ezzaouia three well exploration program was concluded in early October with the rig release from Ezzaouia-16. The Ezzaouia-15 well encountered hydrocarbons over a 21 meter interval and is currently tied-in and producing. Both Ezzaouia-14 and 16 encountered non commercial water saturated hydrocarbons in the targeted formations and have been suspended pending re-evaluation of the 3D seismic.

Al Manzah Field

Production resumed on June 10, 2004 from the Al Manzah water injection project. Centurion's net production from Al Manzah was 332 bopd during Q3 2004. The well has recently stabilized at a rate of 300 bopd and Centurion currently estimates that an additional 50,000 barrels may be recovered from this well.

SEEB Power Plant

Modifications and repairs to the SEEB plant were finalized in August 2004 and the plant resumed full operations in September. Centurion supplied a total of 259 mmcf of gas from El Bibane and 10 mmcf from Ezzaouia to SEEB during the third quarter.

Other Fields

The Ezzaouia and Robbana fields produced on average 365 and 45 bopd respectively during the third quarter 2004. Production from the El Biban field averaged 502 bopd plus the gas sold to SEEB above.

Mellita Permit

Petro-Canada, as operator of the Mellita Permit, have selected the drilling prospects to satisfy the 2 well farmout agreement. One onshore prospect and one offshore prospect have been selected and letters of intent have been sent to the drilling contractors. The first well (the onshore prospect) is anticipated to spud in early 2005.

Performance Highlights
(For Periods ending September 30)
(Canadian Dollars)

--------------------------------------------------------------------
                     3 months     3 months     9 months     9 months
                  ending 2004  ending 2003  ending 2004  ending 2003
--------------------------------------------------------------------
Sales - net of
 royalties ($mm)         21.9          7.8         52.2         34.1
--------------------------------------------------------------------
Cash flow ($mm)          12.9          4.4         30.6         21.2
--------------------------------------------------------------------
Per share basic ($)      0.16         0.07         0.40         0.34
--------------------------------------------------------------------
Per share diluted ($)    0.15         0.07         0.38         0.33
--------------------------------------------------------------------
Earnings ($mm)            3.9          0.7          9.7          7.0
--------------------------------------------------------------------
Per share basic ($)      0.05         0.01         0.13         0.11
--------------------------------------------------------------------
Per share diluted ($)    0.05         0.01         0.12         0.11
--------------------------------------------------------------------
Shares outstanding (mm)  83.2         63.0         83.2         63.0
--------------------------------------------------------------------
Production
 (average boepd)       11,858        4,970       10,525        5,485
--------------------------------------------------------------------
Total production
 (boe)              1,091,000      457,000    2,884,000    1,493,000
--------------------------------------------------------------------

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