Encal Energy Ltd.

CALGARY, Feb. 23 /CNW-PRN/ - Encal Energy Ltd. reports record increases
in financial and operating results, along with major increases in its oil and
gas reserves for the year ended December 31, 1999.  The Company's all in
finding and development costs for 1999 were $7.82 per BOE proven plus 1/2
probable (10:1). Continued operational success and improved commodity prices
have positioned the Company for strong cash flow and earnings growth per share
in 2000. 


    1999 Highlights
    ---------------
    Financial
    - Revenue increased 44% to $253.4 million compared to $176.5 million in
      1998.
    - Funds from operations increased 68% to $124.3 million ($1.16 per share)
      from $74.1 million in 1998 ($0.70 per share).
    - Net earnings for the year ended December 31, 1999 were $25.4 million
      ($0.24 per share) compared to $2.7 million ($0.03 per share) in 1998.
    - Net capital expenditures totalled $197.1 million in 1999 compared to
      $163.5 million in 1998.  Cash flow, debt and proceeds from the sale of
      non-core assets financed the capital program.
    - Long term debt was $301.4 million at year end.  In January 2000 the
      Company's credit facilities were increased to $375.0 million from
      $350.0 million.
    Production
    - Production averaged 29,203 BOE per day compared to 26,694 BOE per day
      in 1998 and during the fourth quarter of 1999 averaged 31,550 BOE per
      day. Production rates of 34,000 BOE per day were achieved during
      December.
    - Approximately 11,900 BOE per day of net new production was added during
      the year at a cost of $16,500 per BOE per day.
    Reserves
    - Proven reserves increased 16% to 96,128 mboe in 1999 from 82,644 mboe
      in 1998.
    - Finding and development costs inclusive of all additions and revisions
      were $8.16 per BOE proven and $7.49 per BOE proven plus probable.
    - 1999 activity resulted in net proven plus probable reserve additions of
      10.6 million barrels of crude oil and NGL and 157 billion cubic feet of
      natural gas or 26.3 million barrel of oil equivalents (10:1).
    - Reserve additions replaced production by a multiple of 2.5 times on a
      proven plus probable basis.
    - 93% of proven reserve additions were generated by the exploration and
      development drilling program.
    - Undeveloped land in Western Canada increased 21 percent to 822,000 net
      acres from 677,000 net acres in 1998.
    2000 Activity
    - The Company forecasts an active capital expenditure program for 2000
      totalling $225.0 million.
    - Approximately 50 gross wells will be drilled during the first quarter,
      with the majority of activity occurring in northeastern British
      Columbia.
    - Activity will be shifting to the West Central Alberta region during the
      third quarter with primary activity concentrated in the Wilson Creek,
      Sylvan Lake and Markerville areas.
    - Activity in the Company's core area expansion, south of the Peace River
      in British Columbia has commenced with two 3-D seismic programs
      underway. Drilling activity will likely commence in the 3rd or 4th
      quarter.


For the purposes of calculating production and unit costs, natural gas is
converted to a barrel equivalent using 10 thousand cubic feet equal to one
barrel unless otherwise stated. 


    <<                         Financial Results
    -------------------------------------------------------------------------
                                           Three Months Ended     Year Ended
                                               December 31       December 31
    -------------------------------------------------------------------------
    ($ thousands except per share amounts)   1999     1998      1999     1998
    -------------------------------------------------------------------------
    Financial
    Petroleum and Natural Gas Sales        84,812   51,077   253,373  176,463
    Average Product Prices
      Natural Gas ($/mcf)                    2.69     2.32      2.38     2.01
      Crude Oil ($/bbl)                     32.90    16.26     25.25    16.43
      Natural Gas Liquids ($/bbl)           26.64    12.28     19.88    13.98
    Average Royalty Rates (%)                18.4     16.9      17.6     16.6
    Operating Costs ($/BOE)                  4.71     4.13      4.49     4.30
    General and Administrative ($/BOE)       0.84     0.94      0.98     1.04
    Depletion and Depreciation ($/BOE)       8.01     7.03      7.32     7.00
    Cash Flow from Operations              42,982   21,978   124,325   74,144
      Per Common Share  Basic                0.40     0.20      1.16     0.70
                        Fully Diluted        0.38     0.20      1.10     0.67
    Net Earnings                           12,396    1,898    25,377    2,737
      Per Common Share Basic                 0.13     0.02      0.24     0.03
                       Fully Diluted         0.12     0.02      0.23     0.03
    Net Capital Expenditures               38,194   32,860   197,093  163,506
    Long Term Debt                                           301,379  223,261
    Total Debt (including Working Capital Deficiency)        305,223  244,229
    -------------------------------------------------------------------------
    Share Information (thousands)
    Shares Outstanding at December 31
      Basic                                                  108,280  106,235
      Fully Diluted                                          115,331  113,161
    Weighted Average Shares Outstanding
     for the Period
      Basic                               108,271  106,082   107,577  105,534
      Fully Diluted                       115,278  113,105   113,971  111,684
    -------------------------------------------------------------------------
                               Operating Results
    -------------------------------------------------------------------------
                                           Three Months Ended     Year Ended
                                               December 31       December 31
    -------------------------------------------------------------------------
                                             1999     1998      1999     1998
    -------------------------------------------------------------------------
    Production
      Natural Gas (mcf per day)           161,938  150,429   153,407  143,098
      Crude Oil (bbls per day)             10,813   10,016     9,927    9,313
      Natural Gas Liquids (bbls per day)    4,543    3,447     3,935    3,071
      Total (BOE per day) 10:1             31,550   28,506    29,203   26,694
      Total (BOE per day) 6:1              42,346   38,535    39,430   36,234
    -------------------------------------------------------------------------
    Reserves (as at December 31, 1999)
    Crude Oil and Natural Gas Liquids (mbbls)
      Proven                                                  39,242   34,498
      Proven plus Probable                                    53,334   47,837
    Natural Gas (bcf)
      Proven                                                     569      481
      Proven plus Probable                                       783      682
    Barrel of Oil Equivalent (mboe)
      Proven - 10:1                                           96,128   82,644
      Proven - 6:1                                           134,052  114,741
      Proven plus Probable 10:1                              131,635  115,989
      Proven plus Probable 6:1                               183,836  161,424
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                             Proven      Proven Plus Probable
    -------------------------------------------------------------------------
    ($ Millions - Before Income Taxes)   1999      1998     1999      1998
    -------------------------------------------------------------------------
    Present Value of Future Cash Flow
    Discounted at 10%                     809       609    1,011       801
    Discounted at 12%                     752       561      929       729
    Discounted at 15%                     681       502      830       642
    The corporate reserves are prepared by Gilbert Laustsen Jung Associates
    Ltd. as of January 1, 2000
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                              1999              1998
    -------------------------------------------------------------------------
    Drilling Activity                   Gross       Net    Gross       Net
                                        -----       ---    -----       ---
    Natural Gas Wells                      74      53.6       62      32.0
    Crude Oil Wells                        31      15.4       45      26.1
    Dry Holes                              36      29.1       31      24.2
                                        ----------------------------------
    Total Wells                           141      98.1      138      82.3
                                        ----------------------------------
    Success Rate (%)                       74        70       78        71
    -------------------------------------------------------------------------
                         Finding and Development Costs
                                                  1999              1998
    -------------------------------------------------------------------------
    Net Capital Expenditures ($ thousands)
    Land and Lease                               19,257             9,765
    Seismic                                       7,270             4,228
    Drilling and Completions                     98,321            75,941
    Property Acquisitions                        50,414            64,454
    Property Dispositions                       (28,325)          (49,069)
    Facilities                                   39,327            49,073
    Eastern Canada                                7,125             7,075
    Office Capital                                2,397             2,039
    Capitalized General and Administrative        1,307              -
                                            ---------------------------------
    Total Finding and Development Expenditures  197,093           163,506
                                            ---------------------------------
    -------------------------------------------------------------------------
                                       Cumulative
                                        1997-1999     1999     1998     1997
    -------------------------------------------------------------------------
    Reserve Additions and Finding Costs
    Net Capital Expenditures
     ($ thousands)                        518,753  197,093  163,506  158,154
    Proven
    ------
      Net Crude Oil & NGL Reserve
       Additions (mbbls)                   32,511    9,804   10,530   12,177
      Net Natural Gas Reserve
       Additions (bcf)                     373.28   143.39   124.12   105.77
                                       --------------------------------------
      Net Reserve Additions
       (mBOE) - 10:1                       69,839   24,143   22,942   22,754
      Net Reserve Additions
       (mBOE) - 6:1                        94,724   33,702   31,217   29,805
      Finding and Development Costs
       ($/BOE) - 10:1                        7.43     8.16     7.13     6.95
      Finding and Development Costs
       ($/BOE) - 6:1                         5.48     5.85     5.24     5.31
    Proven Plus Probable
    --------------------
      Net Crude Oil & NGL Reserve
       Additions (mbbls)                   37,671   10,557   11,445   15,669
      Net Natural Gas Reserve
       Additions (bcf)                     418.61   157.48   129.06   132.07
                                       --------------------------------------
      Net Reserve Additions
       (mBOE) - 10:1                       79,532   26,305   24,351   28,876
      Net Reserve Additions
       (mBOE) - 6:1                       107,440   36,804   32,955   37,681
      Finding and Development Costs
       ($/BOE) - 10:1                        6.52     7.49     6.71     5.48
      Finding and Development Costs
       ($/BOE) - 6:1                         4.83     5.36     4.96     4.20
    -------------------------------------------------------------------------
                                 Balance Sheets
                               As at December 31
                                                  1999              1998
    -------------------------------------------------------------------------
                                                      ($ thousands)
    Assets
    Current
    Accounts Receivable                          58,337            28,303
    Inventory                                     7,784            10,207
    -------------------------------------------------------------------------
                                                 66,121            38,510
    Petroleum Property and Equipment            706,375           584,512
    Deferred Foreign Exchange Losses              2,048             7,017
    -------------------------------------------------------------------------
                                                774,544           630,039
    -------------------------------------------------------------------------
    Liabilities and Shareholders' Equity
    Current
    Accounts Payable                             69,965            59,478
    -------------------------------------------------------------------------
    Bank Debt                                   229,214           146,736
    Senior Notes Payable                         72,165            76,525
    Site Restoration and Reclamation             11,959             9,403
    Future Income Taxes                          81,818            61,034
    Commitments                                    -                 -
    -------------------------------------------------------------------------
                                                395,156           293,698
    -------------------------------------------------------------------------
    Shareholders' Equity
    Share Capital                               256,590           249,407
    Retained Earnings                            52,833            27,456
    -------------------------------------------------------------------------
                                                309,423           276,863
    -------------------------------------------------------------------------
                                                774,544           630,039
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                Statements of Earnings and Retained Earnings
                                           Three Months Ended     Year Ended
                                               December 31       December 31
    -------------------------------------------------------------------------
                                             1999     1998      1999     1998
    -------------------------------------------------------------------------
                                       ($ thousands except per share amounts)
    Revenues
    Petroleum and Natural Gas Sales        84,812   51,077   253,373  176,463
    Royalties                              15,627    8,608    44,505   29,269
    Hedging Charges                         4,422    2,920     7,161    6,867
    -------------------------------------------------------------------------
                                           64,763   39,549   201,707  140,327
    -------------------------------------------------------------------------
    Expenses
    Production                             13,683   10,828    47,908   41,910
    General and Administrative              2,452    2,460    10,395   10,153
    Financing Charges                       5,167    4,071    17,959   13,362
    Depletion and Depreciation             23,260   18,430    78,000   68,200
    -------------------------------------------------------------------------
                                           44,562   35,789   154,262  133,625
    -------------------------------------------------------------------------
    Earnings Before Taxes                  20,201    3,760    47,445    6,702
    -------------------------------------------------------------------------
    Taxes
    Future Income Taxes                     7,208    1,389    20,300    2,475
    Large Corporation Tax                     597      473     1,768    1,490
    -------------------------------------------------------------------------
                                            7,805    1,862    22,068    3,965
    -------------------------------------------------------------------------
    Net Earnings for the Period            12,396    1,898    25,377    2,737
    Retained Earnings, Beginning
     of the Period                         40,437   25,558    27,456   24,719
    -------------------------------------------------------------------------
    Retained Earnings, End of the Period   52,833   27,456    52,833   27,456
    -------------------------------------------------------------------------
    Earnings Per Share
    Basic                                    0.13     0.02      0.24     0.03
    Fully Diluted                            0.12     0.02      0.23     0.03
    -------------------------------------------------------------------------
                          Statements of Cash Flows
                                           Three Months Ended     Year Ended
                                               December 31       December 31
    -------------------------------------------------------------------------
                                             1999     1998      1999     1998
    -------------------------------------------------------------------------
                                       ($ thousands except per share amounts)
    Cash Flows from Operating Activities
    Net Earnings for the Period            12,396    1,898    25,377    2,737
    Depletion and Depreciation             23,260   18,430    78,000   68,200
    Future Income Taxes                     7,208    1,389    20,300    2,475
    Amortization of Deferred Foreign
     Exchange Losses                          118      261       648      732
    -------------------------------------------------------------------------
    Cash Flows from Operating Activities   42,982   21,978   124,325   74,144
    Change in Non-Cash Working Capital      6,290    2,813   (21,326)     159
    -------------------------------------------------------------------------
                                           49,272   24,791   102,999   74,303
    -------------------------------------------------------------------------
    Cash Flows from Financing Activities
    Bank Debt                              42,206    8,098    82,478   74,777
    Senior Notes Payable                       (4)      11       (39)      27
    Common Shares                             152    1,422     7,183    4,898
    -------------------------------------------------------------------------
                                           42,354    9,531    89,622   79,702
    -------------------------------------------------------------------------
    Cash Flows from Investing Activities
    Additions to Petroleum Property
    and Equipment                        (47,955) (34,169) (174,520)(148,121)
    Acquisitions of Petroleum Property
     and Equipment                        (1,808) (44,053)  (50,414) (64,454)
    Sales of Petroleum Property
     and Equipment                        11,569   45,362    28,325    49,069
    Site Restoration and Reclamation        (121)    (346)     (214)    (899)
    Change in Non-Cash Working Capital   (53,311)  (1,116)    4,202    10,400
    -------------------------------------------------------------------------
                                         (91,626) (34,322) (192,621)(154,005)
    -------------------------------------------------------------------------
    Change in Cash                          -        -         -         -
    -------------------------------------------------------------------------
    Cash Flows from Operations Per Share
    Basic                                   0.40     0.20      1.16      0.70
    Fully Diluted                           0.38     0.20      1.10      0.67
    -------------------------------------------------------------------------
    >>



SOURCE Encal Energy Ltd. 
-0-                              02/23/2000 
/CONTACT: David D. Johnson, President and Chief Executive Officer, or
Steven A. Allaire, Vice President, Finance and Chief Financial Officer, Encal
Energy Ltd., Telephone: (403) 750-3300,  Facsimile: (403) 266-2337, Email:
invrel(at)encal.com, Web: www.encal.com/ 
(ENL. ECA) 
CO:  Encal Energy Ltd.
ST:  Alberta
IN:  OIL
SU:  ERN 
-30- 
-0- Feb/23/2000   16:51
EOS   (PRN)    Feb/23/2000    16:51       85
â
-0- (PRN) Feb/23/2000   17:05
 
 
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