Endeavour has reported that its revenues increased more than 50% to $71.5 million during the third quarter of 2008 reflecting sales volumes of 8,500 barrels of oil equivalent per day. This compares to revenues of $47.2 million for the same period in 2007.
The company reported net income to common stockholders for the third quarter of 2008 of $75.5 million or $0.36 per diluted share as compared to a net loss of $11.7 million or $0.09 per diluted share for the same period in 2007. Discretionary cash flow for the period grew to $30.1 million as compared to $27.2 million reported in the third quarter of 2007.
Net income as adjusted for the quarter was $5.9 million, or $0.03 per diluted share, compared to net loss as adjusted of $1.7 million, or $0.01 per diluted share, in the third quarter last year. Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) increased to $47.8 million in the third quarter this year from $32.4 million in the third quarter a year ago.
"It is fair to say that Endeavour is the only company among the small-cap independents in the North Sea that is self-funded with an active and successful drilling program and assets under development which can increase production significantly in 2010," said William L. Transier, chairman and chief executive officer.
"The company continues to demonstrate strong financial performance and the ability to generate cash flow while reducing debt by another $15 million for the second quarter in a row. During the quarter, we also extended our run of exploration and appraisal successes to nine wells including sidetracks with two near-field exploration discoveries in Norway."
Operational highlights of the third quarter include:
A String of Exploration Successes in Norway Continues
Endeavour and its partners have made seven consecutive discoveries in the Norwegian North Sea as part of satellite drilling near the Njord and Brage fields in Norwegian North Sea. A discovery well and sidetrack at the Noatun C prospect in PL107 encountered gas condensate in the targeted Jurassic sandstone with preliminary estimates by the operator Statoil Hydro of recoverable resources between 30 - 50 million barrels oil equivalent.
The Noatun wells are potential tiebacks to the Njord field that lies 16 kilometers south. Endeavour holds a 2.5 percent equity interest in the Noatun discovery and Njord field. In addition, Endeavour announced a discovery at the Knockandoo prospect in PL055 with production to begin immediately upon completion from Brage field facilities. The Brage platform well, 31/4-A-01 AT2, found oil in the upper part of the Middle Jurassic Brent Group. Endeavour has 4.44% equity in the well and the Brage field.
The Submission of a Field Development Plan for Columbus Discovery
Endeavour and its partners have submitted a Field Development Plan (FDP) for the Columbus field located on Block 23/16f in the United Kingdom sector of the Central North Sea. The plan calls for a multi-phased subsea tieback to link Columbus production to the BP-operated ETAP processing complex located 23 kilometers to the west. First production is forecast to begin in the second half of 2010.
The Columbus gas condensate discovery was announced in December 2006 after well 23/16f-11 tested at a rate of 17.5 million cubic feet of gas per day and 1,060 barrels of condensate per day. Two successful appraisal wells drilled during the fourth quarter of 2007 confirmed the field commerciality. Endeavour owns a 25 percent working interest in Block 23/16f.
Upcoming Drilling Operations
During the fourth quarter, Endeavour expects to participate in two strategic wells in the United Kingdom sector of the North Sea. The company will operate the drilling of the Rochelle appraisal well scheduled to spud mid-November in Block 15/27 in the Moray Firth Basin.The company holds a 55.6 percent interest in the well.
The first appraisal well in Fault Block II at the Cygnus gas discovery made in 2006 on Block 44/11 in the Southern Gas Basin is also slated to begin drilling in late November. Endeavour owns a 12.5 percent interest in the block.
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