Q2 2007 results: net earnings increased 51.6%, net earnings before exceptional items increased 8.1%, while production rose 9.5%



    TSX: PBC

    MONTREAL, Aug. 15 /CNW Telbec/ - PEBERCAN INC. (the "Company"),
(TSX: PBC), is pleased to disclose its results for the period ended June 30,
2007. All amounts referred to in this press release are in U.S. dollars.

    Highlights
    ----------

    Performance: 2nd quarter of 2007 (compared with 2nd quarter of 2006)

    
    - Net earnings increased by 51.6%, or $10,968,000(1) ($0.15 per basic
      share)
    - 9.5% increase in the total production of Block 7, to reach
      1,737,184 barrels (19,090 barrels a day)
    - Pebercan's net share of total Block 7 production at 655,022 barrels
      (7,198 barrels a day)
    - Cash flow from operating activities of $19,321,000.
    - 41 wells in production as at June 30, 2007: 9 in Canasi, 22 in Seboruco
      and 10 in Santa Cruz, for a total of 13 more wells than at the end of
      June 2006

    Forward-looking statements
    --------------------------

    Over the next several quarters, Pebercan is planning to continue to
develop and mine its deposits in production in Block 7: Santa Cruz, Canasi and
Seboruco, while also going forth with its northern expansion in the Canasi
field. The Company will be drilling two additional wells in Santa Cruz prior
to the end of the year (STC 203 and 304: drilling underway). It will also be
deepening one of its Seboruco wells (SEB-101-RE) and one of its Canasi wells,
to notably conduct tests aimed at assessing the potential of its stretch north
of the deposit, called the second duplex. The drilling activity will be funded
by the Company's working capital.
    The Company is also working on a project for improved recovery of oil in
Canasi. Digital simulations are underway, and will be followed by the
installation of a hot fluid injection pile for testing in one area of the
field, with the objective of eventually extending the process to the entire
structure. In addition, Pebercan has approached Cupet and ENERGAS in an effort
to develop associated gas in the Santa Cruz field.
    Pebercan is also staying up to date with regard to diversification
opportunities, namely the exploration, development and mining of oil and gas
deposits outside of Cuba.

    Financial position
    ------------------
                            -------------------------------------------------
                                 Quarter ended             Half-year ended
                                       June 30                     June 30
    -------------------------------------------------------------------------
    in thousands (except
    data by share and for
    number of wells)        2007          2006          2007          2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Oil sales (gross)
     ($)                  26,605        26,677        53,435        52,360
    -------------------------------------------------------------------------
    Drilling services
     ($)                    -133         1,152           186         1,997
    -------------------------------------------------------------------------
    Total revenue ($)     26,472        27,829        53,621        54,357
    -------------------------------------------------------------------------
    Net earnings ($)      10,968         7,236        17,572        16,057
    -------------------------------------------------------------------------
    Net earnings per
     share, basic ($)       0.15          0.10          0.24          0.22
    -------------------------------------------------------------------------
    Net earnings per
     share, diluted
     ($)                    0.14          0.10          0.23          0.21
    -------------------------------------------------------------------------
    Internal funds
     before non-cash
     items ($)            19,321        19,490        42,178        40,168
    -------------------------------------------------------------------------
    Internal funds
     before non-cash
     items, by share
     ($)                                  0.26                        0.55
    -------------------------------------------------------------------------
    Gross selling
     price of oil ($)      40.62         39.59         35.76         38.80
    -------------------------------------------------------------------------
    Total production
     of Block 7
     (thousands of
     barrels)              1,737         1,587         3,502         3,119
    -------------------------------------------------------------------------
    Retroactive
     production of
     Santa Cruz
     deposit
     (thousands of
     barrels)                              423                         423
    -------------------------------------------------------------------------
    Pebercan's share
     (thousands of
     barrels)                655           546(c)      1,494         1,222
    -------------------------------------------------------------------------
    Pebercan's share
     (thousands of
     barrels)
     (December 2004
     to March 2006)                        127(c)                      127(c)
    -------------------------------------------------------------------------
    Number of wells
     in production
     (end of period)          41(a)         28(b)         41(a)         28(b)
    -------------------------------------------------------------------------
    Weighted average
     of shares in
     circulation:
    -------------------------------------------------------------------------
      Basic shares    74,497,016    73,176,797    74,378,169    72,960,213
    -------------------------------------------------------------------------
      Diluted shares  75,699,090    75,815,852    75,639,841    75,812,447
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (a) Excluding Canasi wells temporarily closed (4 since February 2004 and
        2 since November 2004)
    (b) The Santa Cruz deposit was declared marketable on June 30, 2006 and
        its production since the 4th quarter of 2004 included in the Block
        billing for the 2nd quarter of 2006.
    (c) Total share as at June 30, 2006 = 673,759 barrels total,
        i.e. 546,348 barrels + 127,411.


    -------------------------------------------------------------------------
    In thousands of $                                   As at         As at
         (except for current ratio)                   June 30,  December 31,
                                                         2007          2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash and cash equivalents                          32,567        15,212
    -------------------------------------------------------------------------
    Working capital                                    79,762        59,152
    -------------------------------------------------------------------------
    Current ratio                                         4.6           2.3
    -------------------------------------------------------------------------
    Oil and gas properties                            131,227       131,123
    -------------------------------------------------------------------------
    Total assets                                      237,688       237,047
    -------------------------------------------------------------------------
    Shareholders' equity                              178,166       160,309
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Results: 2nd quarter of 2007
    ----------------------------

    The total production(2) of Block 7 for the second quarter of 2007 was
1,737,184 barrels (19,090 barrels a day), compared with 1,587,359 barrels
(17,444 barrels a day) for the second quarter of the previous fiscal year,
which represents an increase of 9.5%.
    Pebercan's net share of the production(3) of Block 7 for the second
quarter of 2007 was 655,022 barrels (7,198 barrels a day), compared with
546,348 barrels (6,003 barrels a day) for the second quarter of 2006, an
increase of 19.9%.
    Pebercan's revenues dropped by 5% during the quarter ended June 30, 2007,
to $26,472,000, compared with $27,829,000 for the second quarter of 2006.
    These revenues are comprised of revenues from oil sales, which remained
steady. Hence, at the end of June 2007, oil revenues were at $26,605,000,
compared with $26,677,000 for the second quarter of 2006. In 2006, the Company
posted revenues from drilling in the amount of $1,152,000. These drilling
activities were discontinued at the start of 2007, which explains the slight
decrease in revenues.
    Gross earnings from oil production were $11,647,000 ($17.78 a barrel) for
the second quarter of 2007, compared with $13,824,000 ($20.52 a barrel) for
the second quarter of 2006. This represents a drop of 15.75%. During the
second quarter of 2006, drilling activities generated gross earnings of
$247,000.
    Despite the slight decrease in total revenues and the shutdown of drilling
activities, Pebercan nonetheless realized net earnings of $10,968,000 ($0.15
per basic share and $0.14 per diluted share) for the second quarter of 2007,
compared with $7,236,000 ($0.10 per basic and diluted share) for the same
period in 2006, which constitutes an increase of 51.6%. This hike is mostly
due to a rise in the selling price of oil, as well as to exceptional revenues
from currency gains and from the sale of drilling equipment. These figures
take into consideration exceptional items, which were at $3,147,000 for the
second quarter of 2007. Net earnings before exceptional items are therefore
$7,821,000, up by 8.1%.

    Results: 1st half-year of 2007
    ------------------------------

    In the first half of 2007, the total production(4) of Block 7 was
3,502,641 barrels (19,352 barrels a day) versus 3,199,693 barrels (17,182
barrels a day) for the first half of 2006, representing an increase of 12.3%.
    Pebercan's net share of the total production(5) of Block 7 for the first
half of 2007 was 1,494,179 barrels, a 22.25% increase over the figure of
1,222,315 barrels for the first half of 2006.
    Pebercan's revenues linked to oil sales were $53,435,000 for the first
half of 2007, a 2% increase over the first half of 2006, when it realized
sales of $52,360,000. This increase is largely due to improved recovery of
interests in oil on Block 7, combined with a significant hike in the selling
price of oil.
    The Company did not record any revenues from drilling activities for the
second half of 2007. These revenues stood at $1,997,000 for the first half of
the previous year. Drilling notably generated gross earnings of $274,000 for
the first half of 2006.
    Pebercan realized net earnings of $17,572,000 ($0.24 per basic share and
$0.23 per diluted share) during the first half of 2007, compared with net
earnings of $16,057,000 ($0.22 per basic share and $0.21 per diluted share)
for the first half of 2006. This rise is explained by increased oil
production, additional recovery of interests in oil, and the strong hike in
the selling price of oil.

    Financial situation
    -------------------

    As at June 30, 2007, Pebercan had cash and cash equivalents valued at
$32,567,000, compared with $15,212,000 as at December 31, 2006. The Company's
working capital remained high at $79,762,000, compared with $59,152,000 at the
close of the last fiscal year. Despite ongoing negotiations with Cuban
authorities, Cupet continues to owe the Company outstanding payments, which
have yet to be cleared.

    Major investments
    -----------------

    During the second quarter of 2007, the Company initiated activities for
the development of oil properties for an amount of $10,093,000 (compared with
$19,279,000 in the second quarter of 2006). As regards the first half of 2007,
activities for the development of oil properties in the amount of $24,048,000
($30,390,000 in the first half of 2006) were undertaken.
    Pebercan drilled 6 wells between January 1 and June 30, 2007. At the end
of the first half of 2007, the Company had 41 producing wells, 9 of these in
Canasi, 22 in Seboruco and 10 in Santa Cruz.
    Pebercan's interim consolidated financial statements and management report
for the period ended June 30, 2007 are available on our Web site at
www.pebercan.com, as well as on SEDAR's Web site, at www.sedar.com.

    Pebercan Inc. is committed to the exploration, development and mining 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 stock is listed on the TSX under the symbol PBC.

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

    The forward-looking statements contained in this press release involve a
number of known and unknown risks and uncertainties as well as other factors,
the effect of which may be that the Company's actual results, performance and
accomplishments differ significantly from the future results, performance and
accomplishments stated or implied in such forward-looking statements. The
Company has no obligation to update or modify such forward-looking statements,
either as a result of new information, future events or for any other reason,
and we expressly deny any such obligation in relation thereto. The Company's
most recent annual and interim reports and other documents filed with the
relevant securities commissions and regulators in Canada contain important
additional information on such risks and uncertainties.

    ---------------------------
    (1) This amount includes exceptional items for a total of $3,147,000.
        Also, 2006 comparative earnings take into consideration earnings from
        the retroactive development of Santa Cruz.
    (2) To ensure comparable data, figures for retroactive production at the
        Santa Cruz deposit in the 2nd quarter of 2006, namely 422,910 barrels
        total production and 127,411 barrels Pebercan share, were removed.
    (3) Idem 2.
    (4) Idem 2.
    (5) Idem 2.
    
    %SEDAR: 00004118EF




For further information:

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

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