Press Release
February 12, 1998
MMRL ANNOUNCES RECORD PRODUCTION & RESERVE GROWTH IN 1997
MMRL is pleased to announce that it achieved record production in 1997 accompanied by a 64% increase in total oil and gas reserves.
The Company is also pleased to report another exploration success onshore in the UK. It has made an oil discovery on its Keddington prospect with initial production of 200 barrels per day.
Crude oil and natural gas liquids production in 1997 averaged 6,514 barrels per day, a 21% increase over the previous year. Natural gas production averaged 14.1 mmcf per day representing an increase of 38% over 1996.
Reserves increased on a proven and probable basis by 64% to 45 million BOE as of December 31, 1997. On a proven and half probable basis, reserves increased by 43% and on a proven basis reserves increased by 14%. This is the largest increase in total reserves by volume for the company in its history and represents a reserve replacement ratio of 4.5 times on a proven and half probable basis.
| Crude Oil & NGLs |
Natural Gas |
Future Net Cash Flow
($000's, discounted) |
||||
| (as at December 31, 1997) | (mbbls) | (mmcf) | BOE* | 0% | 10% | 15% |
| |
||||||
| Proven | 15,486 | 49,834 | 21,855 | 254,023 | 164,643 | 140,919 |
| Probable | 13,364 | 61,961 | 23,140 | 268,623 | 132,913 | 102,165 |
| |
||||||
| Total | 28,850 | 111,795 | 44,995 | 522,646 | 297,556 | 243,084 |
| |
||||||
| Proven & Half Probable | 22,168 | 80,814 | 33,425 | 388,334 | 231,099 | 192,002 |
| |
||||||
| * The Company has adopted the international practice of reporting barrels of oil equivalent for its activities outside Canada using a 6:1 conversion ratio for gas to oil. For Canadian activities, a 10:1 conversion ratio continues to be used. | ||||||
In the past year, MMRL's UK exploration drilling program got well underway resulting in the discovery of two new major oil pools and a doubling of reserves at its Saltfleetby discovery. This onshore success, along with its new initiatives offshore in the UK sector of the North Sea, led to the considerable growth in reserves as well as contributing to a finding and development cost of $4.76 per BOE on a proven plus half probable basis.
The Company's drilling results are summarized as follows:
| 1997 | ||||
| Gross |
Net |
|||
| Oil Wells | 29 | 18 | ||
| Gas Wells | 19 | 6 | ||
| Dry and Abandoned Wells | 23 | 13 | ||
| Injector Wells | 1 |
0 |
||
| Total Wells | 72 |
37 |
||
| Success Ratio | 68% | 65% | ||
The Company expanded its UK onshore undeveloped land base substantially in 1997 and an application for exploration licences totaling a further three quarters of a million acres was submitted late in the year. An announcement of the results of this licence application is expected shortly. These onshore interests along with its 1997 offshore UK acquisitions provide a wide range of exploration and development opportunities for MMRL.
MMRL invested heavily in 1997 in projects which are expected to contribute to its long term growth. A large inventory of exploration and development projects was assembled during the year and exploitation of these opportunities will be aggressively pursued in 1998.
Audited financial results for 1997 are expected to be available in late March. The Company's shares trade on the Toronto Stock Exchange under the symbol MM.
For more information contact:
| In Canada: Raymond R. Pether Chief Operating Officer |
In the United Kingdom: Peter Braaten President & CEO |
|
| (416) 362-0714 | (0171) 814-6644 |