Addax Petroleum Corporation, announced its results for the quarter ended March 31, 2008. The financial results are prepared in accordance with Canadian GAAP and the reporting currency is US dollars.
The company's announcement coincides with the filing with the Canadian and U.K. securities regulatory authorities of Addax Petroleum's Audited Consolidated Financial Statements for the quarter ended March 31, 2008 and related Management's Discussion and Analysis.
Conference call will be held for analysts and investors today Tuesday, May 6, 2008 at 11.00 a.m. Eastern Time / 4.00 p.m. London, U.K. Time. Full details can be found at the end of this announcement.
Commenting today, Addax Petroleum's President and Chief Executive Officer, Jean Claude Gandur, said: "I am pleased to report that Addax Petroleum's performance in the first three months of 2008 continues to build upon our track record for delivering robust results, strong operational performance and excellent netbacks. Exploration and appraisal activity this year has been very encouraging and we are pleased to add further to our exploration portfolio through the acquisition of the Iroko exploration license in Cameroon. In the Kurdistan Region of Iraq, we are integrating the promising results of the two most recent step-out appraisal wells into a full field development plan and have commenced construction of an early production facility. Lastly, we have significantly expanded our ability to fund additional future growth through our first senior unsecured credit facility obtained successfully despite the difficult credit markets, which is a demonstration of the support for Addax Petroleum's strategy and growth potential in the financial community."
Petroleum sales before royalties in the first quarter of 2008 amounted to $1,154 million, an increase of 84 per cent over petroleum sales before royalties of $627 million in the first quarter of 2007.
The increase in petroleum sales before royalties was primarily driven by a 66 per cent increase in the average crude oil sales price in the first quarter of 2008 to $96.03 per barrel (/bbl) as compared to $57.86/bbl realized in the first quarter of 2007 and a 12 per cent increase in sales volumes between the same periods. Noteworthy in the first quarter of 2008 is that oil production exceeded sales volumes by 0.64 MMbbl, or the equivalent of approximately 7 Mbbl/d, resulting in a large build of oil in inventory.
Funds Flow From Operations for the first quarter of 2008 increased 78 per cent to $469 million ($3.02 per basic share) compared to $263 million ($1.70 per basic share) in the first quarter of 2007.
Net income in the first quarter of 2008 increased 204% to $240 million ($1.54 per basic share) compared to $79 million ($0.51 per basic share) in the corresponding period in 2007.
Capital expenditures increased by 57 per cent to $340 million in the first quarter of 2008 from $216 million in the first quarter of 2007.
Development capital expenditures totaled $246 million in the first quarter, an increase of 68 per cent over development capital expenditure of $146 million in the first quarter of 2007. Exploration and appraisal capital expenditures increased to $94 million in the quarter, an increase of 34 per cent over exploration and appraisal capital expenditures of $70 million in the first quarter of 2007.
At the end of the first quarter 2008, bank debt totaled $1,125 million, an increase of $150 million over the corresponding quarter in 2007. Bank debt is currently drawn under a 5-year, $1.6 billion senior secured term facility, with 4 years remaining.
In late April 2008, the Corporation expanded its borrowing capacity and entered into a 2-year, $450 million senior unsecured bank loan facility. This loan facility is currently undrawn, but is intended to provide funding for future growth opportunities through potential acceleration of or increase in capital expenditure projects and/or other acquisition opportunities.
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