"This quarter's results reflect the positive impact of our acquisition of UK producing interests in late 2006," said William L. Transier, chairman, chief executive officer and president. "For the first full quarter since the purchase, these assets have outperformed our initial estimates and generated cash flows that we will put to work in our exploration and development activities."
Without the effect of an unrealized loss of $15.7 million relating to the change in the fair market value of oil and gas derivative contracts, income would have been $1.9 million or $0.02 per diluted share. Actual loss for the period was $6.0 million or $0.05 per diluted share as compared to a loss of $6.9 million or $0.09 per diluted share in the same quarter last year. Revenues for first quarter 2007 were $42.8 million as compared to $8.5 million during the same period in 2006. Oil and gas sales for the quarter were 913,000 (BOE) at an average realized price of $58.97 per BOE.
Highlights for the quarter include:
First full-quarter of production from acquisition of interests in the United Kingdom - Endeavour gained a significant position in several producing oil and gas fields in the Central North Sea at the end of 2006. Combined with production from its Norwegian interests, the company had sales of approximately 10,000 barrels of oil equivalent per day (BOEPD) during the first quarter 2007, which compares to 1,700 BOEPD for the same period in 2006.
The planned drilling of four wells as part of ongoing exploration campaign - Current plans for 2007 call for the company to participate in the drilling of three wells in the United Kingdom sector of the North Sea and one well on the Norwegian Continental Shelf.
* Balgownie prospect, Block 30/23b - Later this week, Endeavour will commence drilling operations for the Balgownie prospect on Block 30/23b in the Central Graben region that will test a Fulmar sand objective. The company is operator and will hold a 45 percent working interest in the license after regulatory approval of a farm-out agreement with Atlantic Petroleum for a 15 percent working interest. The well will be the first of two wells to be drilled by the company this year with the GlobalSantaFe Galaxy II jack-up rig. * Emu prospect, Block 48/1a - This well is scheduled to begin drilling in the Southern Gas Basin with the Galaxy II in mid-to-late summer and will test a Leman sandstone objective. Endeavour will serve as well operator with a 25 percent working interest in the license. * NW Flank prospect, Njord field - Endeavour will participate in the drilling of an exploration well in Norway during the third quarter. The company holds a 2.5 percent working interest in the NW Flank Prospect in the Haltenbanken Basin that will test the middle to lower Jurassic section in two fault blocks. * Acer, Block 16/18b - The Acer prospect in the South Viking Graben area of the North Sea has been plugged and abandoned. The prospect tested an Upper Jurassic sandstone target south of the Brae and Miller fields. Endeavour holds a five percent working interest in the well.
Commitment to drill the first appraisal well at the Columbus discovery - Endeavour and its partners have committed to drill the first appraisal well at the Columbus discovery on Block 23/16f in the Central North Sea in the third quarter. The SEDCO 704 semi-submersible has been contracted to drill a well to the north of the discovery.
The final phase of development in the Enoch Field on Block 16/13a - Production is expected to begin later in May from the Enoch field located on the median between the United Kingdom and Norway. Endeavour expects initial net production of 1,000 BOEPD. The company holds an eight percent interest in the field.
Endeavour International Corp. is an international oil and gas exploration and production company focused on the acquisition, exploration and development of energy reserves in the North Sea.
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