Kroes Energy Says 1Q06 Earnings Are Up
Kroes Energy Inc. (TSX Venture: KRS) announced that net earnings for the first quarter of 2006 amounted to $116,574 compared to $102,681 in the same period in 2005. Cash from operations totaled $276,209, an increase of 84% from the prior year period. These improvements were the result of higher prices and modestly higher production and were achieved despite the imposition of a new 41% royalty by the Ukrainian government.
Crude oil production averaged 237 barrels per day compared to 209 barrels per day for the first quarter of 2005. New production from three wells put on steam during 2005 was partly offset by the shut-in of two other wells for mechanical repairs.
In Ukraine, a meeting of the Kashtan joint venture was recently held and a work program for the drilling of two more wells and production facilities was proposed, along with the declaration of a dividend that would net Kroes some $175,000. These issues are subject to the final approval of the participants in the next few weeks. The well No. 303 was completed in May and the initial production rate from the K1 zone was 100 barrels per day (45 b/d net to Kroes). The main P1/P2 zone also is oil bearing and will be available for production in the future.
In western Canada, the Company's first shallow gas prospect has been successfully re-completed in the Viking zone and is awaiting a service rig to re-complete the Glauconitic zone then put the well on production. The Company has agreed to participate in two additional prospects and is presently evaluating another two prospects.
The $2 million financing by way of Short Form Offering Document that was announced early in May is proceeding with the agent, Octagon Capital Corporation. The offering is expected to close in June 2006.
Kroes Energy is a junior oil and gas producer and explorer participating
in the Lelyaki Oilfield redevelopment project in Ukraine, one of Eastern
Europe's fastest growing economies. It also has a Joint Venture agreement in