Endeavour Achieves Q3 Profit
Endeavour International Corporation reported 2006 third quarter income of $15.3 million or $0.16 per diluted share as compared to a loss of $14.5 million or $0.19 per diluted share in the same quarter in 2005. Net income for the third quarter of 2006 includes unrealized gains on commodity derivative instruments of $20.5 million. Revenues for third quarter 2006 were $6.7 million as compared to $10.9 million during the same period in 2005. Production for the quarter was 125,000 barrels of oil equivalent (BOE) at an average realized price of $54.02 per BOE. This compares to production of 199,000 BOE at an average realized price of $54.63 per BOE for the same period in 2005.
"Endeavour has been transformed into a balanced exploration and production company with a solid platform for growth," said William L. Transier, chairman, chief executive officer and president. "With our expanded base of production, we now have the cash flow to accelerate our exploration and development activities."
Significant events for the second half of the year include:
- Acquisition of first producing assets in the United Kingdom -- On November 1, 2006, Endeavour completed its acquisition of interests in eight fields in the North Sea that averaged daily production of approximately 8,800 barrels of oil equivalent during the first half of the year.
- Resumption of exploration drilling campaign -- Two exploratory wells are currently drilling in the UK sector of the North Sea. The Columbus exploratory prospect in Block 23/16f began drilling on October 28, 2006. Endeavour holds a 25 percent working interest and serves as operator of the well that will test a Palaeocene-age geologic target. The company also has agreed to acquire a 10 percent working interest in the Bacchus prospect that is currently drilling in the northern part of Block 22/6a. The prospect will test the commercial potential of a discovery well that was drilled in 2005 and flowed oil from an Upper Jurassic sandstone. In addition, Endeavour has an option to purchase a 10 percent working interesting in the Howgate prospect in Block 9/4 in the event of a discovery. The Howgate well is expected to begin drilling in December 2006 utilizing a rig currently contracted to Endeavour for drilling the Columbus prospect. The well will target an Upper Jurassic sandstone located updip of a previously drilled well that encountered hydrocarbons.
- Continued development of the Enoch field with first oil expected to flow in the first quarter -- Drilling operations have been successfully completed for the single, extended-reach horizontal producing well in the Enoch field. Sub-sea tie-back operations and final facilities installations are in progress with first production expected in the first quarter of 2007. Endeavour holds an eight percent working interest in this field.
- Completion of agreement for exploration activities in Outer Moray Firth region -- Endeavour has entered into an agreement pursuant to which Nexen Petroleum U.K. Limited, a subsidiary of Nexen Inc., will take a 50 percent working interest in Block 15/12a in return for funding a mutually agreed one-year exploratory work program and serving as operator of the block. Nexen U.K. also has the option subsequently to utilize one of its rig commitments to drill a well on the block.
- Participation in the 24th UK Seaward Licensing Round -- For the third year, Endeavour was active and submitted applications in the annual offshore licensing round held by the Department of Trade and Industry (DTI). The volume of applications and the number of new entrants into the round have delayed the announcement of the awards previously expected in September. The DTI is expected to announce the awards later this month. The round included 80 previously licensed blocks that were inactive and released through the government's fallow acreage initiative.
- Participation in the Norwegian APA 2006 Licensing Round -- Endeavour submitted applications again for the offshore licensing round conducted by the Norwegian Ministry of Petroleum and Energy (MPE). Industry participation was very high and awards normally made in December have been delayed by the MPE to early 2007.
Endeavour International Corporation 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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