2008 second quarter results: Revenues increase 33.33%, net earnings increase 20.8% - Total production up 4.8%



    TSX: PBC

    MONTREAL, Aug. 15 /CNW Telbec/ - Pebercan Inc. (the "Company") (TSX: PBC)
today announced its results for the second quarter ended June 30, 2008. All
amounts in this press release are in U.S. dollars.

    Highlights
    ----------

    2008 second quarter results (compared with the second quarter of 2007)

    
    - Net earnings increased 20.8% to $13,244,000 ($0.18 per share, basic and
      diluted).
    - Total production from Block 7 increased 4.8% to 1,820,569 barrels
      (20,006 barrels/day).
    - Pebercan's net share of total production from Block 7 reached
      569,883 barrels (6,262 barrels/day), down 13%.(1)
    - Cash flows generated by operating activities were $22,902,000 but late
      payments continue.
    - Forty-three wells in production as at June 30, 2008: 10 on Canasi;
      20 on Seboruco; and 13 on Santa Cruz.

    Outlook
    -------

    Management intends to continue enhancing its concessions in the Republic
of Cuba. It also plans to further develop the Canasi, Seboruco, and Santa Cruz
deposits so as to:

    - optimize operations;
    - offset the natural decline in production; and
    - confirm new reserves in order to maintain high production levels over
      the long term.

    Financial Highlights
    --------------------
                            -------------------------------------------------
                                    Quarters ended          Six months ended
                                           June 30                   June 30
    -------------------------------------------------------------------------
    In thousands (except for
     figures per share and
     number of wells)            2008         2007         2008         2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gross oil sales ($)        35,468       26,605       69,008       53,435
    -------------------------------------------------------------------------
    Drilling services ($)                     -133                       186
    -------------------------------------------------------------------------
    Total revenues ($)         35,468       26,472       69,008       53,621
    -------------------------------------------------------------------------
    Net earnings ($)           13,244       10,968       25,349       17,572
    -------------------------------------------------------------------------
    Net earnings per
     share: basic ($)            0.18         0.15         0.34         0.24
    -------------------------------------------------------------------------
    Net earnings per
     share: diluted ($)          0.18         0.14         0.34         0.23
    -------------------------------------------------------------------------
    Cash flow before
     non-cash items ($) (b)    22,902       19,321       46,743       42,178
    -------------------------------------------------------------------------
    Cash flow per
     share before
     non-cash items ($)
    -------------------------------------------------------------------------
    Gross selling
     price of oil ($)           62.24        40.62        56.54        35.76
    -------------------------------------------------------------------------
    Total production :
     Block 7 (in thousands
     of barrels)                1,821        1,737        3,603        3,503
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Pebercan's
     proportionate share
     (in thousands of
     barrels)                     570          655        1,220        1,494
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Number of wells in
     production
     (end of period)             43(c)        41(a)        43(c)        41(a)
    -------------------------------------------------------------------------
    Weighted average
     number of shares
     outstanding:
    -------------------------------------------------------------------------
    Basic                  74,583,335   74,497,016   74,583,335   74,378,169
    -------------------------------------------------------------------------
    Diluted                75,629,240   75,699,089   75,544,354   75,639,841
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    a) Excluding wells temporarily shut down on Canasi (four since
       February 2004, and two since November 2004).
    b) Refer to the note "Non-GAAP Measures."
    c) Excluding the shut down wells: Seb 150, STC 202, Can 4, and Can 100

    -------------------------------------------------------------------------
                                                                       As at
    In thousands of $                                As at June     December
     (except working capital ratio)                    30, 2008     31, 2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash                                                 27,576       21,741
    -------------------------------------------------------------------------
    Working capital                                     136,116      103,511
    -------------------------------------------------------------------------
    Working capital ratio                                  21.1          9.3
    -------------------------------------------------------------------------
    Oil and gas properties                              129,043      135,565
    -------------------------------------------------------------------------
    Total assets                                        272,687      252,376
    -------------------------------------------------------------------------
    Shareholders' equity                                227,299      201,938
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    2008 Second Quarter Results
    ---------------------------

    Total production from Block 7 was up 4.8% to 1,820,569 barrels
(20,006 barrels/day), compared with 1,737,184 barrels (19,090 barrels/day) in
the second quarter of 2007.
    Pebercan's net share of total Block 7 production was 569,883 barrels
(6,262 barrels/day), down 13% from the 655,022 barrels recorded in the second
quarter of 2007 (7,198 barrels/day). The decrease is explained by the increase
in Profit Oil, on which the Company's percentage share is lower than its cost
recovery.
    In the quarter ended June 30, 2008, Pebercan's revenues increased 33.3% to
reach $35,468,000 compared with $26,472,000 for the same quarter in 2007.
    These revenues consist of revenues derived from oil sales. The significant
increase in these revenues is largely explained by the surge in the price per
barrel which rose from $40.62/barrel in the second quarter of 2007 to
$62.24/barrel in the second quarter of 2008. It should also be noted that oil
sales in the second quarter of 2007 were $26,605,000, from which $133,000 was
deducted after Pebercan ceased its drilling activities in early 2007.
    It should be noted that Pebercan's revenues increased despite the terms of
the sales agreement renegotiated with Cupet, whereby the discounts rose from
18% and 19% to 26% and 27% respectively.
    In the second quarter of 2008, gross profit from oil production was
$22,232,000 ($39.01/barrel) up 90.88% from $11,647,000 ($17.78/barrel) in the
second quarter of 2007.
    Pebercan recorded net earnings of $13,244,000 ($0.18 per share, basic and
diluted), compared with $10,968,000 ($0.15 per share, basic, and $0.14 per
share, diluted) a year earlier, an increase of 20.8%.
    The increase in net earnings is mainly the result of the increase in
international oil indices.
    Finally, it should be noted that the gross profit recorded in the second
quarter of 2007 reflected a $1,971,000 gain on the disposal of drilling
equipment sold in April 2007.

    Results for the First Half of 2008
    ----------------------------------

    For the first half of 2008, total production from Block 7 was
3,603,168 barrels (19,798 barrels/day), compared with 3,502,641 barrels
(19,245 barrels/day) for the same period last year, an increase of 2.9%.
    For the same period, Pebercan's net share of the total production from
Block 7 was 1,220,582 barrels, compared with 1,494,179 barrels in the first
half of 2007, a decrease of 18.31%.
    Pebercan's proportionate share for the six-month period ended June 30,
2008 was 34%, compared with 43% for the same period in 2007.
    The decrease in Pebercan's net share, and consequently, its proportionate
share, is explained by the increase in profit oil, on which Pebercan's
production share is lower than on cost recovery.
    For the first half of 2008, Pebercan's revenues derived from oil sales
increased 29.1% to reach $69,008,000 from $53,435,000 recorded in the first
half of 2007. This increase is primarily explained by a significant increase
in the selling price of oil which rose 58.1%, from $35.76/barrel at the end of
June 2007 to $56.54/barrel as at June 30, 2008.
    In fact, the increase is significant, despite the terms of the sales
agreement renegotiated with Cupet, whereby the discounts increased from 18%
and 19% to 26% and 27% respectively.
    For the first half of 2008, Pebercan's net earnings totalled $25,349,000
($0.34 per share, basic and diluted), compared with $17,572,000 ($0.24 per
share, basic, and $0.23 per share, diluted) for the first half of 2007, an
increase of 44.1%. The increase is mainly the result of the increase in the
selling price of oil.

    Financial Position
    ------------------

    As at June 30, 2008, Pebercan had $27,576,000 in cash and high working
capital, which was $136,116,000 compared with $103,511,000 at the end of the
previous fiscal year.
    Late payments by CUPET have not been settled to date despite ongoing
negotiations with the authorities. The due dates of the last four months
(April 2008 to July 2008) provided for in the last debt rescheduling agreement
were not honoured, except for a $2 million payment (for the partners).

    Investments
    -----------

    In the second quarter of 2008, expenses for exploration and development
work on oil properties totalled $7,390,000 ($10,093,000 in the second quarter
of 2007).
    In the first quarter of 2008, expenses for exploration and development
work on oil properties totalled $14,234,000 ($24,048,000 in the first quarter
of 2007).
    In the first half of 2008, Pebercan finished drilling well STC-305,
drilled well Seb-160 and performed workovers on Can-100, Can-2, STC-100,
STC-104, STC-200 and STC-103. At the end of the first half of the year, 43
wells were in production: 10 on Canasi; 20 on Seboruco; and, 13 on Santa Cruz.

    Pebercan's interim consolidated financial statements and Management's
Report for the period ended June 30, 2008 are available on our Web site at
www.pebercan.com, as well as on SEDAR at www.sedar.com.

    Pebercan is involved in the exploration, development and exploitation of
oil reserves in the Republic of Cuba. Pebercan sells all of its production to
the Cuban government but is not bound by any restrictions regarding the sale
of its oil. The Company's shares are listed on the TSX and trade under the
symbol PBC.

    Legal Notice-Forward-Looking Statements
    ---------------------------------------

    Forward-looking statements contained in this press release involve known
and unknown risks, uncertainties or other factors that may cause actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Pebercan disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Important additional
information identifying risks and uncertainties is contained in the Company's
most recent annual and interim reports and forms filed with the applicable
Canadian securities regulatory authorities.

    ----------------------------------
    (1) This is explained by the increase in the level of profit oil, on
        which the Company's percentage share is lower than on cost recovery
    
    %SEDAR: 00004118EF c4388




For further information:

For further information: RENMARK Financial Communications Inc.: Henri
Perron: hperron@renmarkfinancial.com; Dan Symons:
dsymons@renmarkfinancial.com, (514) 939-3989, Fax: (514) 939-3717,
www.renmarkfinancial.com; PEBERCAN Inc.: Christophe Ranger,
cranger@pebercan.com, (514) 286-5200, Fax: (514) 286-5177

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PEBERCAN INC.

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