Encal Energy Ltd. Second Quarter For the Six Months Ended June


                         30, 2000 
    Setting Targets to Drive Performance 
      CALGARY, July 27 /CNW-PRN/ - 
      Encal Reports Strong Results and 
    Core Area Acquisition 
    << 
                                    Three months ended     Six months ended 
                                         June 30              June 30 
    ($ thousands except per                          %                      % 
    share amounts)                2000     1999 Change   2000     1999 Change 
    ------------------------------------------------------------------------- 
    Financial 
       Petroleum and Natural 
        Gas Sales               109,062   51,741  111  205,769   98,964  108 
       Cash Flow From Operations 56,224   24,772  127  105,826   45,978  130 
       Per Common Share 
          - Basic                  0.51     0.23  122     0.97     0.43  126 
          - Fully Diluted          0.49     0.22  123     0.92     0.41  124 
       Net Earnings              17,609    3,635  384   32,254    5,069  536 
       Per Common Share 
          - Basic                  0.16     0.03  433     0.30     0.05  500 
          - Fully Diluted          0.16     0.03  433     0.29     0.05  480 
       Net Capital Expenditures  37,677   22,465   68  103,357   74,607   39 
       Long Term Debt           312,192  262,654   19  312,192  262,654   19 
       Weighted Average Outstanding Shares (thousands) 
          - Basic               108,891  107,436    1  108,628  106,981    2 
          - Fully Diluted       116,243  113,447    2  115,797  113,330    2 
       Shares Outstanding (thousands) 
       June 30 - Basic                                 109,136  107,938    1 
               - Fully Diluted                         116,621  113,447    3 
       July 21 - Basic                                 109,138  107,941    1 
               - Fully Diluted                         116,693  113,427    3 
      Operations 
       Production 
       - Natural Gas (mcf/d)    160,176  142,558   12  165,621  146,806   13 
       - Crude Oil (bbls/d)      12,175    9,280   31   11,592    9,405   23 
       - Natural Gas Liquids 
         (bbls/d)                 4,510    3,555   27    4,675    3,508   33 
       - Total (BOE/d) (6:1)     43,381   36,595   19   43,871   37,381   17 
       - Total (BOE/d) (10:1)    32,703   27,091   21   32,829   27,594   19 
       Pricing 
       - Natural Gas ($/mcf)       3.64     2.15   69     3.24     2.18   49 
       - Crude Oil ($/bbl)        38.03    22.24   71    37.94    18.95  100 
       - Natural Gas Liquids 
         ($/bbl)                  33.84    15.82  114    32.84    13.89  136 
    >> 
      Highlights 
    ---------- 
    - $110 million property acquisition in Medicine River area strengthens 
      Encal's Wilson Creek to Markerville corridor. 
    - Cash flow from operations for the first six months ended June 30, 2000 
      increased 130 percent to $105.8 million compared to $46.0 million 
      during the same period in 1999. 
    - Record earnings of $32.3 million recognized for the six months ended, 
      an increase of 536 percent over 1999. 
    - Production increased 19 percent to average 32,829 BOE/d compared to 
      27,594 BOE/d during the same period in 1999. 
        Financial 


  Petroleum and natural gas sales for the six months ended June 30, 2000 
totaled $205.8 million compared to $99.0 million reported during the same 
period in 1999. Royalty rates averaged 21.4 percent during the six months 
ended June 30, 2000 compared to 17.3 percent during the same period in 1999. 
The increase in royalty rates in 2000 is primarily due to increased commodity 
prices. Operating costs averaged $4.61 per barrel of oil equivalent during the 
six months ended June 30, 2000 compared to $4.32 per barrel of oil equivalent 
during the same period in 1999. General and administrative costs averaged 
$1.03 per barrel of oil equivalent during the six months ended June 30, 2000 
compared to $1.06 per barrel of oil equivalent for the same period in 1999.  
Operating netbacks in the six months averaged $22.46 per barrel of oil 
equivalent compared to $12.07 per barrel of oil equivalent in the first six 
months of 1999.  
For the six months ended June 30, 2000, cash flow from operations was 
$105.8 million ($0.97 per share) compared to $46.0 million ($0.43 per share) 
during the same period of the prior year. Earnings were $32.3 million ($0.30 
per share) compared to $5.1 million ($0.05 per share) in 1999.  
Total capital expenditures for the six months ended June 30, 2000 were 
$103.4 million compared to $74.6 million for the same period in 1999. 
Exploration expenditures during the period inclusive of land, seismic, 
drilling and completions accounted for $83.7 million with an additional $15.4 
million incurred on equipment, gathering systems and facilities. During the 
six months ended June 30, 2000 the Company has spent $5.6 million on 
acquisitions of core properties and received $2.6 million from the disposition 
of non-core properties. Long term debt was $312.2 million at June 30, 2000 
compared to $301.4 million at December 31, 1999 and $262.7 million at June 30, 
1999.  
  Production  
For the six months ended June 30, 2000, natural gas production increased 
13 percent to 165.6 million cubic feet per day from 146.8 million cubic feet 
per day during the same period of 1999. Increases in natural gas production 
are attributable to successful exploration and development activity at the 
Markerville and Wilson Creek properties.  
Oil and NGL production increased 26 percent to 16,267 barrels per day for 
the six months ended June 30, 2000 compared to 12,913 barrels per day for the 
same period in 1999. The increase in production is a result of successful oil 
exploration and development activity at Rigel and Westerose combined with 
increased natural gas liquids production at Markerville and Wilson Creek.  
  Marketing  
Encal's crude oil prices doubled, averaging $37.94 per barrel during the 
six months ended June 30, 2000 compared to $18.95 for the same period in 1999. 
Natural gas liquids prices increased 136 percent averaging $32.84 per barrel 
during the six months ended June 30, 2000 compared to $13.89 per barrel in 
1999.  
Early in the second quarter, crude oil prices dipped slightly as a result 
of OPEC's March announcement of a 700,000 barrel per day production increase. 
The NYMEX WTI price has, however, moved back over $US 30.00 per barrel in 
recognition that additional production increases are needed to keep crude oil 
inventories above critical levels. Consistent with recent announcements, Encal 
expects Saudi Arabia to increase production in the near term to ensure OPEC's 
basket price range is met.  
Encal's natural gas price increased by approximately 50 percent averaging 
$3.24 per thousand cubic feet during the six months ended June 30, 2000 
compared to $2.18 per thousand cubic feet during the same period in 1999. This 
is reflective of the dramatic increase in North American natural gas market 
prices and the structure of Encal's gas portfolio, which has the majority of 
its sales at market pricing. The fixed price physical sales reduced quarterly 
gas prices by approximately $0.25 per thousand cubic feet. The majority of 
these transactions will expire in October 2000.  
The need to refill natural gas storage and increased demand from the 
power generation sector is expected to test the productive capability of North 
America in the months to come. This has resulted in a sharp increase in 
natural gas prices during the second quarter of 2000. The NYMEX natural gas 
price increased from $US 2.34/MMBtu in January to $US 4.24/MMBtu for June. 
Western Canadian prices also reflect this with an increase of NIT/AECO prices 
from $2.95/GJ to $4.60/GJ for the same period.  
  West Business Unit  
During the second quarter, the West Business Unit drilled five more 
delineation wells on a North Pine light oil discovery at Squirrel, British 
Columbia. Well results, combined with reservoir engineering data, indicate 
that this field may contain more than 15 million barrels of original oil 
in-place, plus gas. At least five additional locations are planned for the 
third quarter. Combined production from the Company's Charlie Lake projects at 
Rigel, Oak and Squirrel now exceeds 8,000 net barrels equivalent per day. In 
northwestern Alberta, development drilling continued on several recent 
discoveries at Grande Prairie and Teepee. For the balance of 2000, the 
Business Unit expects to drill 30 wells, including up to 15 locations on the 
natural gas exploration project South of the Peace River in British Columbia.  
  East Business Unit  
The second quarter was highlighted by successful Crown land acquisitions 
and continued optimization and drilling on the key properties in Markerville, 
Sylvan Lake and Wilson Creek. During the second half of the year drilling 
activity is expected to significantly build in this area with in excess of 
thirty locations identified for drilling.  
In the Irricana area, the southeast extension of the successful 
Markerville/Innisfail play, the Company has added significant additional land. 
Through regional farmins, Encal has now increased its presence to over 58,000 
gross acres in this area. An active drilling program has commenced with 
multi-zone potential on the farmin blocks with six to eight wells planned by 
year-end. The Company is also continuing the maturation of other initiatives. 
On the Deep Basin initiative, two prospects were matured to the drilling phase 
with this activity planned to commence in the third quarter. New play 
generation continues in the O'Chiese area where a minimum of three prospects 
will be drilled in the third quarter.  
  West Central Asset Acquisition  
The Company has signed a definitive agreement for the acquisition of a 
significant package of producing properties, undeveloped land, processing and 
gathering facilities. The properties are located in the Medicine River/Sylvan 
Lake area of west central Alberta and are being purchased from a major 
producer.  
The transaction will add approximately 3,500 boe per day of production 
and 12.7 million boe of proven reserves. The Company has identified 
approximately 15 to 20 exploitation drilling locations on the properties and 
these will be drilled between the fourth quarter of 2000 and the second 
quarter of 2001.  
The total transaction, which is effective August 1, 2000, is valued at 
approximately $110 million and will be funded by the subsequent sale of 
non-core assets and approximately $90 million of new debt. Total debt at the 
end of 2000 is forecast to be $360-370 million with year 2000 cash flow 
estimated to be $250-260 million. The cost of this acquisition, inclusive of 
exploitation activities planned for the balance of 2000, is expected to be 
below $7.00 per barrel of oil equivalent per day (6:1) and $8.00 per barrel of 
oil equivalent per day (10:1) on established reserves with production addition 
costs in the $21,500 barrel of oil equivalent per day (6:1) and $26,000 barrel 
of oil equivalent per day (10:1) range.  
As a result of this investment, Encal has increased capital expenditures 
for 2000 from $225 million to $315 million.  
  Appointment of New Directors  
In June, Encal announced the appointment of two new directors to its 
Board, Mr. G.S. (Gil) Bennett and Mr. W.C. (Dub) Wilson. Mr. Bennett, who will 
take over as Chairman from Mr. Thomas Taylor, has a strong business and law 
background. He is a non-executive Chair of Canadian Tire Corporation Ltd. and 
Bracknell Corporation. Mr. Wilson recently retired as Senior Vice President 
and Chief Financial Officer of EOG Resources, Inc. (formerly Enron Oil & Gas 
Company) in Houston, Texas.  
In conjunction with the appointment of Mr. Bennett and Mr. Wilson, Mr. 
Thomas Taylor retired from the Board of Directors. The Board of Directors and 
executives of Encal would like to thank Mr. Taylor for his contribution over 
the past four years. Mr. Taylor has led the Encal Board through a period of 
steady growth and value appreciation.  
  Outlook  
The Company continues to position itself for growth in 2001 and beyond. 
Our core area expansion initiatives at Irricana in West Central Alberta and 
our South of the Peace River initiative in British Columbia continue to evolve 
and have the potential to fuel growth into the future for the Company. The 
recently announced acquisition at Medicine River increases our dominance in 
our Wilson Creek to Markerville corridor and adds exploitation opportunities 
that will also contribute to 2001 growth.  
The Company will continue to exercise its investment discipline when 
considering acquisition opportunities to ensure profitable growth. The 
Medicine River acquisition demonstrates this discipline with a sizable 
investment that is accretive to earnings and cash flow.  
Encal believes it is well positioned to capitalize on the current 
commodity price environment and to continue to generate profitable growth into 
the future.  


       On behalf of the Board 
        ``Signed'' 
    David D. Johnson 
    President and CEO 
    July 27, 2000 
      << 
    ENCAL ENERGY LTD. 
    Balance Sheets 
                                                June 30       December 31 
    ($ thousands)                               2000           1999 
    ---------------------------------------------------------------------- 
                                            (unaudited) 
    Assets 
       Current 
       Accounts Receivable                     61,412          58,337 
       Inventory                                9,530           7,784 
    ---------------------------------------------------------------------- 
                                               70,942          66,121 
       Petroleum Property and Equipment       766,420         706,375 
       Deferred Foreign Exchange Losses         3,553           2,048 
    ---------------------------------------------------------------------- 
                                              840,915         774,544 
    ---------------------------------------------------------------------- 
    ---------------------------------------------------------------------- 
      Liabilities and Shareholders' Equity 
       Current 
       Accounts Payable                        59,702          69,965 
    ---------------------------------------------------------------------- 
       Bank Debt                              238,227         229,214 
       Senior Notes Payable                    73,965          72,165 
       Site Restoration and Reclamation        13,278          11,959 
       Future Income Taxes                    110,307          81,818 
    ---------------------------------------------------------------------- 
                                              435,777         395,156 
    ---------------------------------------------------------------------- 
         Shareholders' Equity 
       Share Capital                          260,349         256,590 
       Retained Earnings                       85,087          52,833 
    ---------------------------------------------------------------------- 
                                              345,436         309,423 
    ---------------------------------------------------------------------- 
                                              840,915         774,544 
    ---------------------------------------------------------------------- 
    ---------------------------------------------------------------------- 
        ENCAL ENERGY LTD. 
    Statements of Earnings and retained earnings 
      For the Six Months Ended June 30 
    (unaudited, $ thousands except per share amounts) 
                                               2000            1999 
    ---------------------------------------------------------------------- 
    Revenues 
       Petroleum and Natural Gas Sales        205,769          98,964 
       Royalties                               44,039          17,102 
       Hedging Charges                         10,355             261 
    ---------------------------------------------------------------------- 
                                              151,375          81,601 
    ---------------------------------------------------------------------- 
      Expenses 
       Production                              27,550          21,564 
       General and Administrative               6,145           5,294 
       Financing Charges                       11,191           8,313 
       Depletion and Depreciation              44,812          35,210 
    ---------------------------------------------------------------------- 
                                               89,698          70,381 
    ---------------------------------------------------------------------- 
      Earnings Before Taxes                      61,677          11,220 
    ---------------------------------------------------------------------- 
    Taxes 
       Future Income Taxes                     28,489           5,349 
       Large Corporation Tax                      934             802 
    ---------------------------------------------------------------------- 
                                               29,423           6,151 
    ---------------------------------------------------------------------- 
      Net Earnings for the Period                32,254           5,069 
    Retained Earnings, Beginning of Period     52,833          27,456 
    ---------------------------------------------------------------------- 
    Retained Earnings, End of Period           85,087          32,525 
    ---------------------------------------------------------------------- 
    ---------------------------------------------------------------------- 
      Earnings per Share 
       Basic                                     0.30            0.05 
       Fully Diluted                             0.29            0.05 
    ---------------------------------------------------------------------- 
    ---------------------------------------------------------------------- 
        ENCAL ENERGY LTD. 
    Statements of Cash Flows 
      For the Six Months Ended June 30 
    (unaudited, $ thousands except per share amounts) 
                                                2000           1999 
    ---------------------------------------------------------------------- 
      Cash Flows From Operating Activities 
       Net Earnings for the Period             32,254           5,069 
       Depletion and Depreciation              44,812          35,210 
       Future Income Taxes                     28,489           5,349 
       Amortization of Deferred Foreign 
        Exchange Losses                           271             350 
    ---------------------------------------------------------------------- 
       Cash Flows From Operating Activities   105,826          45,978 
       Change in Non-Cash Working Capital     (14,337)        (22,722) 
    ---------------------------------------------------------------------- 
                                               91,489          23,256 
    ---------------------------------------------------------------------- 
      Cash Flows From Financing Activities 
       Bank Debt                                9,013          42,318 
       Senior Notes Payable                        24              32 
       Common Shares                            3,759           5,806 
    ---------------------------------------------------------------------- 
                                               12,796          48,156 
    ---------------------------------------------------------------------- 
      Cash Flows From Investing Activities 
       Additions to Petroleum Property 
        and Equipment                        (100,321)        (78,135) 
       Acquisitions of Petroleum Property 
        and Equipment                          (5,619)        (11,862) 
       Sales of Petroleum Property 
        and Equipment                           2,583          15,390 
       Site Restoration and Reclamation          (181)            (28) 
       Change in Non-Cash Working Capital        (747)          3,223 
    ---------------------------------------------------------------------- 
                                             (104,285)        (71,412) 
    ---------------------------------------------------------------------- 
    Change in Cash                                  -               - 
    ---------------------------------------------------------------------- 
    ---------------------------------------------------------------------- 
      Cash Flows From Operations per Share 
       Basic                                     0.97            0.43 
       Fully Diluted                             0.92            0.41 
    ---------------------------------------------------------------------- 
    ---------------------------------------------------------------------- 
    >> 


  Encal Energy Ltd. is an intermediate oil and gas exploration and 
production company, headquartered in Calgary, Alberta, Canada. The Company 
focuses on natural gas and light oil projects, placing a strong emphasis on 
efficiently finding and producing reserves. The Company focuses its activity 
in two core areas in Western Canada, in northeast British Columbia and west 
central Alberta. Encal is publicly traded on the Toronto Stock Exchange, 
symbol ENL, and on the New York Stock Exchange, symbol ECA.  
  Certain information contained herein may constitute forward-looking 
statements under applicable securities laws. Such statements are subject to 
known or unknown risks and uncertainties that may cause actual results to 
differ materially from those anticipated or implied in the forward-looking 
stateents. 
  

SOURCE  Encal Energy Ltd.  
  -0-                              07/27/2000  
/CONTACT: Kathryn A. Wade, David Johnson, President and CEO, Steven 
Allaire, Vice President, Finance and CFO and Corporate Secretary, Tel: 
403-750-3300 or Fax: 403-266-2337, Website: www.encal.com/  
(ENL. ECA)  
CO:  Encal Energy Ltd. 
ST:  Alberta 
IN:  OIL 
SU:  ERN  
  -30-  
-0- Jul/27/2000 22:52 GMT 
EOS   (PRN)    Jul/27/2000    18:52       85 
â 
-0- (PRN) Jul/27/2000 23:07 GMT
 
 
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