Category: Uncategorized
- Published: 29 November -0001
News Release: $ 0.12/share cashflow for 2nd quarter, $ 0.23/share cashflow for 1st half
Tappit Resources Ltd ( TPT TSX )
Tappit's current production is in excess of 2,000 boepd. Production mix is 66% oil, 34% gas. In early July we drilled three horizontal wells (2.5 net) at Queensdale, S.E. Saskatchewan. Tappit's net production increase from these wells is approximately 350 bopd, nearly doubling our production in this light oil pool. We intend to drill three additional horizontal wells (1.5 net) at Queensdale in September. Also planned for September is a horizontal well at our Tatagwa property (Tappit 70.3%). Tappit expects to obtain final approvals for our waterflood project at Tatagwa, S.E. Saskatchewan by the end of August. Construction will begin in September and water injection in October. Tappit's share of capital costs for this project is $ 6.3 million. Production at Tatagwa is expected to increase over a one year time frame from the current 400 bopd to an anticipated 1,200 bopd.
Production for the 2nd quarter, while up on a year over year basis, was down slightly from the 1 st quarter of 2002. Minor property sales made in the second quarter brought in $ 1.375 million and reduced production by 70 bopd. As well, a line pressure problem at Cold Lake resulted in the loss of approximately 120 boepd. A booster compressor has now been installed at Cold Lake, and we expect to regain the production loss experienced there.
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Corporate Highlights
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SECOND QUARTER THREE MONTHS ENDED JUNE 30
FINANCIAL (Cdn$) 2ND QTR 2002 2ND QTR 2001 CHANGE
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Petroleum Sales 4,311,542 4,148,454 4%
Cash flow from operations 2,077,512 1,674,237 23%
Basic cash flow per share
- weighted average 0.12 0.09 33%
Net earnings 1,086,399 481,718 126%
Basic earnings per share
- weighted average 0.06 0.03 100%
Shares outstanding at period end 17,897,621 18,000,121 -1%
Weighted average shares 17,842,066 18,164,500 -2%
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PRODUCTION
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Avg daily production (Boepd) 6:1 1,669 1,665 0%
Oil barrels/day 1,020 769 33%
Gas sales mmcf/day 3,894 5,376 -28%
Crude Oil ($/bbl) 35.02 34.68 -1%
Natural Gas ($/Mcf) 3.25 3.17 3%
Avg sales price per boe 28.39 27.38 4%
Avg royalties per boe 5.28 6.13 -14%
Avg operating costs per boe 4.59 5.05 -9%
Netback per boe 18.52 16.20 14%
G & A cost per boe 2.53 2.97 -15%
Interest cost per boe 2.09 2.03 3%
Capital taxes per barrel 0.22 0.15 47%
Cash flow netback per boe 13.68 11.05 24%
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FIRST HALF SIX MONTHS ENDED JUNE 30
FINANCIAL (Cdn$) 2ND QTR 2002 2ND QTR 2001 CHANGE
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Petroleum Sales 8,138,427 9,030,527 -10%
Cash flow from operations 4,020,221 3,892,031 3%
Basic cash flow per share
- weighted average 0.23 0.21 7%
Net earnings 1,549,108 947,031 64%
Basic earnings per share
- weighted average 0.09 0.05 80%
Shares outstanding at period end 17,897,621 18,000,121 -1%
Weighted average shares 17,810,859 18,499,818 -4%
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PRODUCTION
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Avg daily production (Boepd) 6:1 1,771 1,702 4%
Oil barrels/day 1,062 775 37%
Gas sales mmcf/day 4,254 5,562 -24%
Crude Oil ($/bbl) 30.57 35.15 -13%
Natural Gas ($/Mcf) 2.85 3.75 -24%
Avg sales price per boe 25.39 29.31 -13%
Avg royalties per boe 4.46 7.88 -43%
Avg operating costs per boe 4.76 4.73 1%
Netback per boe 16.17 16.70 -3%
G & A cost per boe 1.91 1.97 -3%
Interest cost per boe 1.62 2.02 -20%
Capital taxes per barrel 0.17 0.08 13%
Cash flow netback per boe 12.47 12.63 -1%
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The weighted average number of common shares outstanding in the period was 17,810,859 (2001 - 18,164,500). The Company has a stock based compensation plan that allows certain employees and directors the option to purchase common shares of the Company. The weighted average remaining life of options outstanding at June 30, 2002 was 2.99 years.
Continuity of stock options: Number of options Weighted Average
Exercise Price ($)
Outstanding at January 1, 2002 2,073,500 0.49
Granted 545,000 0.62
Exercised (130,000) 0.44
Forfeited (525,500) 0.48
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Outstanding and exercisable
at June 30, 2002 1,963,000 0.53
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As discussed in note 2, the company does not recognize compensation costs when stock options are issued to employees, officers and directors. Had compensation cost been determined on the basis of fair values, net earnings for the quarter would have been reduced by $16,080 ($0.00 per share) to $1,070,319. The $16,080 reduction represents the fair value of options granted in the quarter, all of which vested immediately upon grant. The fair value of common share options granted is estimated as at the grant date using the Black -Scholes option pricing model, using the following assumptions:
Dividend yield nil
Risk-free interest rate 3.15%
Expected life 5 years
Expected volatility 27%
Tappit Resources Ltd.
Lawrence Bintner
President
Toll Free 1-800-667-4311
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
Website: www.tappit.com
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