The operating income for the third quarter 2005 amounted to NOK 41.6 million. Cash flow from operations in the first nine months of 2005 was NOK 93.3 million, compared with a negative cash flow of NOK 16.7 million in the first nine months of 2004.
Total oil production was 241,064 bbls in Q3 2005 and 518,876 bbls in the first nine months of 2005. In total, Revus sold 235,223 bbls of oil in the third quarter. Revus realized an average oil price of US $62.4 per barrel in the third quarter, which, compared with Q2, constitutes a 22 percent increase.
Net financial items contributed NOK 13.8 million to profits in the first nine months of 2005, of which NOK 11.0 million represents unrealized foreign exchange gains, related to the company's long term receivables and accretion of the abandonment provisions.
Provisions for current and deferred tax in the first nine months of 2005 amounted to NOK 52.2 million, approximately 89 percent of pre-tax income. The high tax rate reflects financial depreciation of license acquisition costs that are not deductible for tax purposes. License acquisition costs are customarily made on an after tax basis.
Investments in Q3 2005 amounted to NOK 33.4 million, of which NOK 13.7 million is related to production activities and NOK 19.7 million is related to exploration activities. Investments in the first nine months of 2005 amounted to NOK 181.9 million, which includes the acquisitions of a 4.5 percent interest in the Veslefrikk field and a 25 percent interest in PL 090B and PL090 C, and the capitalized exploration costs from the successful Astero exploration well.
Revus' total balance sheet as of September 30, 2005 was NOK 755.9 million, compared with NOK 350.2 million at year-end 2004. The increase in the balance sheet reflects the capital injection from the company's IPO in June 2005, in addition to the above-mentioned investments. Total cash and cash equivalents as of September 30, 2005 amounted to NOK 190.5 million. The company's equity ratio was 56 percent.
As of September 30, 2005, Revus had 32 999 632 shares outstanding. The average number of shares outstanding in the first nine months of 2005 was 21,001,511.
On November 1, 2005 Revus signed a Sales and Purchase Agreement with DONG Norge AS for the purchase of 30% interest in PL274 including the Oselvar discovery and further exploration potential. The consideration will be that Revus will cover part of the costs of the planned operations related to DONG's remaining 40% interest.
Revus currently has interests in three producing fields: Brage, Veslefrikk and Murchison. Production in the third quarter averaged 2,620 bopd.
Production in Q3 2005 was 7% lower than plan, primarily due to the unplanned shutdown on Veslefrikk because of reduced lifeboat capacity, reported in Q2 and carried over into Q3. This situation is now resolved.
Murchison is currently producing at its highest level of the year since new well M74 came on stream. Brage is producing as per plan.
Revenues and results in Q4 are expected to be in line with Q3. In addition exploration expenses related to the current Aimee drilling will be incurred in Q4.
Production is expected to be around 2800 bopd for Q4.
Exploration activity remains high. Following the recent Astero discovery, the current Aimee well, and the Blåmannen satellite drilling in Q1 2006, plans are in hand for further exploration drilling in 2006 with the Lie prospect in PL 305 (pending rig availability) and an appraisal well on the Oselvar discovery.
Planning of development activities are continuing for Yme, Fram B, Astero and Oselvar.
Revus continues its exclusive focus on new exploration, development and acquisition opportunities in the mature areas of the Norwegian continental shelf. Our financial position will be further strengthened through a bond issue planned in Q4, which will ensure the company will have the financial flexibility to pursue attractive opportunities on the NCS.
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