Gentry Announces Fourth Quarter and Annual 2007 Financial and Operational Results

    TSX Symbol:GNY

    CALGARY, March 26 /CNW/ - Gentry Resources Ltd. ("Gentry" or the
"Company") is pleased to announce its financial and operating results for the
fourth quarter and year ended December 31, 2007.


    -   Gentry's gross revenue for the three months ended December 31, 2007
        was up 21% to $21,723,421 from $17,924,387 in the corresponding
        period of 2006. For the year, gross revenue was $71,648,695 versus
        $69,832,337 in 2006.

    -   Net income for the fourth quarter was $2,303,650 ($0.04 per share)
        compared to a loss of $931,045 ($0.02 per share) in the corresponding
        period. For the year, net income was $3,757,613 ($0.08 per share), up
        36% from $2,757,210 ($0.07 per share) from 2006.

    -   Funds flow from operations for the fourth quarter was $6,826,271
        ($0.12 per share) up 40% from $4,874,754 ($0.13 per share) in
        fourth quarter 2006. For the year, funds flow from operations was
        $25,332,657 ($0.52 per share), down 17% from $30,444,948 ($0.79 per
        share) in 2006.

    -   Capital expenditures, excluding the corporate acquisition, but
        including asset acquisitions and dispositions were $8,289,016 in the
        fourth quarter of 2007 versus $3,603,423 in the comparative quarter.
        Expenditures for the year totaled $34,739,396 versus $36,248,701 in

    -   Gentry has a sound financial footing based on the strength of its
        balance sheet and a conservative level of debt. The year-end ratio
        for debt to forward year's cash flow of approximately 1.3:1 provides
        the flexibility to aggressively drill Gentry's extensive opportunity
        base in 2008 and 2009.

    -   On April 30, 2007, Gentry announced a $74.25 million acquisition (the
        "Acquisition") which expanded the Company's operations into two new
        core geographic areas with high impact drilling potential - Central
        Alberta and the Peace River Arch. This transaction closed on May 31,

    -   In conjunction with the Acquisition, Gentry entered into a financing
        with a syndicate of underwriters under which 12,500,000 subscription
        receipts at $4.00 each, and 3,750,000 common shares at $4.00 each,
        were issued for gross proceeds of $65 million. The subscription
        receipts were converted into 12,500,000 common shares upon closing of
        the Acquisition.

    -   In 2007 Gentry purchased 437,500 common shares for cancellation under
        its Normal Course Issuer Bid program for $1,218,487.


    -   Daily production for the fourth quarter averaged 4,528 boe/d, up 4%
        from the 4,335 boe/d recorded in the comparative period of 2006.
        Average daily production for the year was 4,070 boe/d, a 3% decrease
        from 4,175 boe/d in 2006.

    -   Daily production for the month of December averaged 4,809 boe/d;
        production for the first quarter 2008 is expected to average
        5,000 boe/d.

    -   Over the last three years Gentry has built or refurbished three
        facilities with a capacity of 10,000 barrels of fluid per day each,
        including gas conservation, and has constructed eight satellite
        stations and over 135 kilometers of pipelines. Its most recently
        constructed battery facility came on stream in January 2008.

    -   Gentry's drilling campaign for the fourth quarter recorded a 75%
        success rate with seven of the eight wells being drilled at the
        Company's Princess property. Eight wells were drilled (8.0 net)
        resulting in three oil wells (3.0 net), three wells waiting
        completion (3.0 net) and two abandoned wells (2.0 net).

    -   For the year 2007, Gentry drilled a total of 49 wells (46.2 net)
        yielding a 84% success rate, resulting in 27 oil wells (24.7 net),
        four gas wells (3.5 net), seven abandoned wells (7.0 net), four
        injection wells (4.0 net), and seven wells (7.0 net) are cased and
        waiting for completion.

    -   As at December 31, 2007, the Company had a drilling inventory on its
        Princess lands of over 150 locations for medium gravity oil and
        natural gas.

    -   Gentry controls 968 square kilometres of 3D seismic data over its
        core Princess property.

    -   Gentry's land holdings in Western Canada increased 54% to 276,652 net
        undeveloped acres (432 sections) from 179,415 acres (280 sections) at
        the end of 2006. Under an ongoing farm-in agreement in the Princess
        area, Gentry has an option to earn an additional 65,000 acres of
        undeveloped land.

    -   Proved plus probable reserves increased 29% to 13.0 mmboe up from
        10.1 mmboe recorded at December 31, 2006.

    -   Proved reserves increased 18% to 7.9 mmboe from 6.7 mmboe on
        December 31, 2006.

    -   Production replacement was 295% on a proved plus probable basis and
        179% for proved reserves, based on 2007 production.

    -   Reserve Life Index ("RLI") increased to 7.9 years on a proved plus
        probable basis, up from 6.4 years at the end of 2006. On a proved
        basis, RLI increased to 4.8 years from 4.2 years.

    -   Oil and natural gas liquids ("NGLs") represent 55% of proved plus
        probable reserves on a boe basis, up from 41% at the end of 2006. Oil
        and NGLs represent 51% of total proved reserves, up from 45% at the
        end of 2006.

    -   The net present value of proved plus probable reserves, discounted at
        5% was $258 million, up 29% from $201 million in the previous year;
        at a 10% discount, the increase was 22% to $208 million from
        $170 million recorded at December 31, 2006.

    -   Year-end net asset value per share, discounted at 5%, was $4.86, and
        $3.95 when discounted at 10%.

    -   Approximately 60% of Gentry's reserves are subject to either freehold
        royalties in Alberta or are in Saskatchewan. The remaining 40% are
        subject to Alberta crown royalty. On October 25, 2007, the Government
        of Alberta announced a proposed New Royalty Framework ("NRF") for oil
        and natural gas royalties in the Province of Alberta effective
        January 1, 2009. Gentry's reserve evaluator, Sproule Associates
        Limited, has estimated that the NRF change to the before tax net
        present value, discounted at 10%, of the estimate future revenue from
        proved plus probable reserves would be an increase of nearly 1% as at
        December 31, 2007. It is possible that the announced changes may be
        amended before coming into effect.

                             Three months ended            Year ended
                                   Dec 31                    Dec 31
                              2007         2006         2007         2006
      Revenue             $21,723,421  $17,924,387  $71,648,695  $69,832,337
      Funds flow from
       operations           6,826,271    4,874,754   25,332,657   30,444,948
        Per share - basic        0.12         0.13         0.52         0.79
      Net income (loss)     2,303,650     (931,045)   3,757,613    2,757,210
        Per share - basic        0.04        (0.02)        0.08         0.07
      Net capital
       expenditures         8,289,016    3,603,423   34,739,396   36,248,701
       acquisition           (400,820)           -   75,991,291            -
      Net debt             59,734,001   47,311,997   59,734,001   47,311,997
      Weighted average
       shares outstanding  55,144,097   38,718,143   48,548,497   38,652,164

      Oil & NGLs (bbls/d)       1,877        1,447        1,591        1,398
      Gas (mcf/d)              15,904       17,331       14,879       16,658
      Barrels of oil
       equivalent (boe/d)       4,528        4,335        4,070        4,175

    Average Prices
      Oil & NGLs (bbls/d)      $69.59       $50.59       $61.79       $57.86
      Gas (mcf/d)                6.63         7.02         6.59         6.63
      Barrel of oil
       equivalent (boe/d)       52.15        44.94        48.23        45.83

      Oil & NGLs (mbbls)                                  7,116        4,184
      Gas (mmcf)                                         35,304       35,542
      Barrel of oil
       equivalent (mboe)                                 13,000       10,109

    Additional information on Gentry's results for the year ended
December 31, 2007, including the Consolidated Financial Statements and
Management's Discussion and Analysis can be found at and on the
company's website at

    2007 Activity Highlights

    2007 was a year when we transformed Gentry's platform for future growth.
In May 2007 we announced the acquisition of two new focus areas; West Central
Alberta and the Peace River Arch in northern Alberta. Both have enriched our
asset base with development opportunities and high-impact exploration in a
variety of multi-zone plays.
    Another milestone was reached in our core Princess area where we
completed drilling commitments under a major farm-in agreement, adding rights
to our Pekisko oil-bearing formation in more than 100 sections of land.
Gentry's dominance of the play now extends over 466 sections, 60% being
largely contiguous undeveloped lands.
    A third important benchmark involved completion of extensive
infrastructure at Princess of which we will start to see the full benefit in
2008. Our operated facilities now capture production from 66 square kilometers
of land. Over the past three years, Gentry has invested in more than
135 kilometers of pipelines, eight satellite stations, miles of roads and
three major production facilities with a combined fluid handling capacity of
approximately 30,000 bbls/d. We are now entering the harvest mode over much of
Princess where we plan to turn our investments in land, exploration and
facilities into solid production gains.

    About Gentry
    Gentry is a Calgary-based company active in the exploration, development
and production of crude oil and natural gas in Western Canada. The Company has
grown primarily through aggressive exploration and development of its lands,
and has recently expanded into two new core areas with both development and
high-impact drilling opportunities. Gentry trades on the TSX under the symbol
"GNY" and currently has 55,044,479 common shares outstanding.


    Reported production represents Gentry's ownership share before the
deduction of royalties. Where amounts are expressed on a barrel of oil
equivalent (boe) basis, natural gas has been converted at a ratio of
six thousand cubic feet to one boe. Boe's may be misleading, particularly if
used in isolation. A boe conversion ratio of six thousand cubic feet to
one barrel is based on an energy equivalent conversion method primarily
applicable at the burner tip and does not represent a value equivalency at the
    Included in the press release are references to financial measures
commonly used in the oil and gas industry such as funds flow from operations,
funds flow from operations per share and operating netbacks. These measures
have no standardized meaning, are not defined by Canadian generally accepted
accounting principles (GAAP), and accordingly are referred to as non-GAAP
measures. These supplemental measures are used by management to assess
operating results between years and between peer companies as they provide an
indication of the results generated by the Company's principal business
activities before the consideration of how these activities are financed or
how the results are taxed.
    Gentry determines funds flow from operations as net income prior to
provisions for depletion, depreciation, and accretion, stock-based
compensation, future income taxes, gains (and losses) on sale of investments,
and after asset retirement expenditures. Funds flow from operations per share
is calculated using the weighted average basic and diluted shares used in the
calculations of net income per share. Operating netbacks are calculated by
deducting royalty, production, and transportation expenses from production
revenue. Gentry's reported amounts may not be comparable to similarly titled
measures reported by other companies. These terms should not be considered an
alternative to, or more meaningful than, cash provided by operating,
investing, and financing activities or net income as determined by Canadian
GAAP as an indicator of the Company's performance or liquidity.
    Certain disclosure in this press release contains forward-looking
statements that involve risks and uncertainties. Such information, although
considered reasonable by Gentry at the time of preparation, may prove to be
incorrect and actual results may differ materially from those anticipated in
the statements made. For this purpose, any statements contained herein that
are not statements of historical fact may be deemed to be forward-looking
statements. Such risks and uncertainties include, but are not limited to:
exploration, development and production risks; insurance; commodity prices,
markets and marketing of crude oil, liquids and natural gas; substantial
capital requirements; liquidity; competition; environmental risks; reserves
replacement; reliance on operators and key personnel; corporate matters;
permits and licenses; additional funding requirements; aboriginal claims;
issuance of debt; availability of drilling equipment; access restrictions;
cost inflation; title defects; uncertainty of reserve information; Kyoto
protocol; and government regulation and taxation.

For further information:

For further information: Hugh Ross, President & Chief Executive Officer,
(403) 264-6161; Ketan Panchmatia, Chief Financial Officer, (403) 264-6161; R.
Gordon McKay, Chief Operating Officer, (403) 264-6161; Roger Fullerton,
Manager, Investor Relations, (952) 929-7243; Website:,

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