The decrease in earnings and cash flow are attributable to decreased revenues received in 2001. Revenues decreased to $14.6 million in 2001 from $27.5 million in 2000. Lower average oil prices during 2001 accounted for $3.5 million of the decrease, while lower production volumes accounted for the remainder.
The resumption of Al Manzah production in late 2001 and the commencement of gas production in Egypt in March, 2002 have increased production to over 5,000 boe per day. Oil prices have also increased by about 30% from year-end levels.
On March 31, 2002, Centurion commenced first production from its Egyptian gas fields. In the last year, Centurion has transformed itself from 1,500 boepd to 5,000 boepd with the addition of the El Wastani Field production in the northern portion of the El Manzala concession in Egypt and resumption of Al Manzah production in Tunisia.
Centurion's 2001 exploration program in Egypt on the El Manzala concession was very successful with three successful wells and a significant increase in reserves. The Plan of Development for these additional reserves (the El Manzala South Project) has been submitted to the Egyptian General Petroleum Corporation with a proposal to produce an additional 35 mmcf per day (about 6,000 boepd). Upon receiving approval and after concluding a gas contract for the new production, Centurion plans to construct a 36km pipeline to bring this production on-stream. It is anticipated that production from these reserves could commence by mid 2003.
Centurion commenced a water injection project in the fall of 2001 by injecting water into the Al Manzah No. 3 well. This program resulted in resumed production from Al Manzah No. 2 well in late December, 2001. The field is currently producing 1,200 bopd (900 bopd net) of high quality crude oil.
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