Superior Energy Posts $197,000 Profit in Q3
|Sunday, November 30, 2003
The third quarter of 2003 was a very exciting period for Canadian Superior and we continued to make significant progress in dealing with our Western Canadian and Offshore Nova Scotia assets. We aggressively moved forward with activities focused on increasing Western Canadian oil and gas production and we successfully dealt with detailed planning matters to ensure that exploration drilling on our "Mariner Project" commenced on a timely basis in November. At the same time we managed to lay the groundwork for increasing our holdings in the Offshore Nova Scotia area and for establishing a significant joint venture agreement in Trinidad encompassing attractive shallow offshore lands. The joint venture lands in Trinidad are on-trend with the large recently-discovered Angostura and Carapal Ridge oil and gas fields and represents a new 'world-class' opportunity for Canadian Superior in one of the most exciting oil and gas exploration basins in the world.
In the Drumheller area, an oil and gas development drilling program was initiated during the third quarter to add new production. To date we have achieved a 100% success rate in the drilling of nine wells. Six wells were completed during the third quarter and produced at a combined rate of approximately 300 boe/d. Three successful additional gas wells were drilled after the end of the third quarter as part of a new 17 well exploration and development drilling program. The three new wells are expected to be tied-in before year-end at an anticipated initial production rate of 500 boe/d.
Offshore Nova Scotia, Canadian Superior and our joint venture partner El Paso proceeded with planning for the first "Mariner Project" exploration well directly offsetting the 1.6 tcf Venture natural gas field. Spudding of the well occurred on November 20, 2003. This is one of the most exciting wells currently drilling in North America. The well is being drilled utilizing the latest in drilling technology and drilling is expected to take approximately 90 days to reach total depth. This well is a high temperature, high pressure well to be drilled to approximately 18,370 feet to evaluate the first of three large structures identified for drilling on the "Mariner Project" license. The well will be one of the deepest wells to be drilled in Canada over the next several months.
In addition to the above-mentioned, during the third quarter of 2003, Canadian Superior was successful in securing a significant joint venture covering a large, shallow offshore license in Trinidad (55,000 acres) with the potential to establish significant oil reserves in the heart of a known hydrocarbons-bearing structural trend.
Highlights of third quarter activities include:
A 137% increase in production to 2,748 boe/d in the third quarter compared to 1,157 boe/d in the third quarter of 2002. A 298% increase in Oil and Gas Revenues to $9.1 million in the third quarter compared to $2.3 million in the third quarter of 2002. Cash Flow from operations of $4.3 million ($0.05 per share) up substantially compared to $0.3 million ($nil per share) in the third quarter of 2002.
Net Earnings of $197,000 compared to a loss of $821,000 in the third quarter of 2002.
Development drilling commenced on our Drumheller area holdings. Six successful oil and gas wells were drilled and completed late the third quarter. Four new oil wells and two new gas wells produced at a combined rate of approximately 300 boe/d.
Planning proceeded for an expanded exploration and development drilling program on our Drumheller area holdings. 17 new exploration and development locations were surveyed during the third quarter. Three successful gas wells were drilled after the end of the third quarter with production tie-ins expected to be completed prior to year-end. The remaining 14 wells are being licensed and are to be drilled over the next several weeks.
Preparations continued for the drilling of our next exploration well Offshore Nova Scotia. During the third quarter, Canadian Superior and El Paso selected a location for the next exploration well, Well I-85, approximately 9 kilometres northwest of the Sable Island Energy Project's Venture gas field. Spudding occurred November 20, 2003 with drilling expected to continue for approximately 90 days at an estimated cost of US$30 million. El Paso is participating in the "Mariner Project" by paying 2/3 of the costs of the "Mariner" test well to earn a 50% interest in the "Mariner Project". Canadian Superior is retaining a 50% interest and is paying 1/3 of costs of the "Mariner" exploration well.
Detailed planning and analysis occurred for the November licensing of additional Offshore Exploration Blocks by the Canada-Nova Scotia Offshore Petroleum Board. Canadian Superior announced on November 13, 2003, that Land Parcels #2 and #4 from this licensing round, covering an aggregate of 312,037 acres, had been obtained for a total Work Commitment Bid of $14,107,000.
On October 8, 2003, as a result of negotiations finalized during the third quarter, we announced the establishment of a significant joint venture with the Petroleum Company of Trinidad and Tobago Limited ("Petrotrin"). The joint venture, known as our "Tradewinds Project", covers 55,000 acres of near shore acreage in the Mayaro Bay/Guayaguayare area, off the East Coast of Trinidad, and is a 'world-class' opportunity on-trend with the recently discovered Angostura and Carapal Ridge fields.
Planning continued for winter access area drilling and testing activities in East Ladyfern area, where two Slave Point natural gas discoveries are to be tested after the return of winter conditions. In addition, a 3-D program covering our 24 section holding is to be shot along with additional area seismic.