CALGARY, Alberta, May 23 /PRNewswire-FirstCall/ -- The following was
released on behalf of the Board of Tracer Petroleum Corporation by
David Robinson President and CEO:
Tracer Petroleum Corporation (OTC Bulletin Board: TCXX)
("Tracer" or the "Company") reports a net loss of $1,513,911 for the
year-ended December 31, 2001, or $0.17 per share, compared to a net loss of
$2,028,006 or $0.28 per share for the year-ended December 31, 2000 (all
figures in Canadian dollars). The loss was primarily a result of
administrative expenditures of $1,196,014 (2000 - $1,609,501) which are mainly
associated with the ongoing pursuit of international petroleum development
opportunities.
Revenue from oil and gas operations was negligible at $1,494
(2000 - $943), and oil and gas operating expenses were nil (2000 - nil).
Depletion expenses were nil (2000 - $55,846).
At December 31, 2001, the Company had total assets of $852,439
(2000 - $1,163,725), a working capital deficiency of $259,221 (2000 working
capital deficiency - $281,483), and shareholders' equity of $241,537
(2000 - $838,085). During the year, the Company raised $848,600 of new equity
capital through private placements and the exercise of share purchase warrants
and stock options. In 2002, Tracer management expects that the Company will
have to raise additional funds through equity and/or debt in order to finance
acquisitions and operations. The Company currently holds 1,060,000 shares of
Transmeridian Exploration Inc., which is a Houston-based oil & gas company
which is quoted on the OTC Bulletin Board.
During 2001, Tracer continued to focus its efforts on creating shareholder
value through the acquisition of or participation in the development of proven
petroleum reserves internationally. In this regard, the Company identified a
number of available petroleum projects in the Islamic Republic of Iran, but
was unable to consummate an agreement covering any of these projects because
of continual delays in securing commitments from the Iranian government and
from Iranian partners. As a result, subsequent to the end of 2001, the
Company made the strategic decision to cease the pursuit of projects in Iran.
Tracer received a total of US$240,762 in loans from Roc Oil Company
Limited of Sydney, Australia, during 2001 under the Company's funding and
strategic partnership arrangement with Roc. These funds were for the pursuit
of projects in Iran. Roc has the option to convert this loan amount into
shares and warrants of Tracer.
Subsequent to year-end 2001, the Company entered into a Joint Venture
Agreement ("JVA") with privately-held Canneft Inc. ("Canneft") of Houston, TX,
whereby Tracer will participate with Canneft in the development of the
Adzhiyap project (the "Project") in southwestern Turkmenistan, bordering Iran
to the south and the Caspian Sea to the west. The Project is primarily a gas
project with estimated total reserves of 3-6 trillion cubic feet of gas (which
is equivalent to approximately 375-750 million barrels of oil, using a
1:8 ratio). Condensate reserves are also present since tests have shown a
concentration of 1 bbl/100 mcf in gas producing zones. There is also strong
potential of deeper oil reserves, estimated at a minimum of 380 million
barrels, which has yet to be evaluated.
The Adzhiyap block is approximately 2,000 square km in area. There is
excellent potential for near-term cash flow because the existing Korpedzhe gas
pipeline to Iran is only 4 km from proven gas wells #6 and #1. The Korpedzhe
line is a 1022mm gas pipeline built for a capacity of 1.18 billion cubic feet
per day but it is presently carrying 500 million cubic feet per day, or 42% of
capacity. Iran currently buys gas from the Korpedzhe pipeline at US$40 per
cubic metre (US$1.13/mcf). An alternate route for a gas pipeline to the north
is also being considered. This line would connect to an existing Gazprom line
currently selling gas to the Ukraine and which is 100 km to the north of the
Adzhiyap block.
Canneft is in the process of negotiating the formal Production Sharing
Agreement ("PSA") for the Project. A protocol was signed March 26, 2001,
between Canneft and the local partner, Turkmengeological, to form a Joint
Operating Company to be owned 75/25 respectively, and apply for a PSA for the
Adzhiyap block. A Commercial Offer was presented to the government in
June 2001 proposing an initial investment of up to US$25 million for a 4-year
work commitment which would include drilling 40 wells and tying into the
pipeline. The wells are estimated to produce 15 million cubic feet per day
per well. The proposed term of the PSA is 25 years, with an option to extend
for a further 5 years.
Tracer and Canneft are working together to secure a technically-competent
Operator to join the Project, since this will be a requirement of the PSA.
The Operator is not required to be a working interest holder in the Project,
but can simply be a qualified contract Operator. Advanced discussions are
underway with a major Russian oil company, to become the Operator.
Development of the Project will commence as soon as possible.
On May 15, 2002, the Corporation announced that based on a lack of
progress in obtaining a petroleum project in Iran, it had made the decision to
cease all activity in that country. Despite the setback of not successfully
completing an agreement to secure a significant petroleum project in Iran,
Tracer's involvement in a very significant international project such as the
Adzhiyap block in Turkmenistan provides an excellent opportunity to create
shareholder value for the Company's shareholders. In the case of the Adzhiyap
project, the potential cash flow to Tracer is quite significant, and could
grow to US$36 million or more per year. Management is confident that the
endeavors of the Company in Turkmenistan will prove to be successful and
wishes to thank the shareholders for their continued support.
Copies of the Annual Audited Financial Statements and a detailed
Management Discussion and Analysis were mailed to shareholders together with
Proxy documentation on Tuesday, May 21st, 2002. They can also be found on
SEDAR at http://www.sedar.com.
Tracer's Annual General Meeting will be held in the Board Room of the law
offices of Baker & McKenzie, Suite 2600, Bow Valley Square 3, 255 - Fifth
Avenue S.W., Calgary, Alberta, on Monday, June 24, 2002, at the hour of
10:00 A.M., Calgary time.
This release contains "forward looking statements" as per Section 21E of
the US Securities and Exchange Act of 1934, as amended. Although the Company
believes that the expectations reflected in such forward looking statements
are reasonable, it can give no assurance that such expectations will prove to
have been correct. Management is currently reviewing many options and there
is no assurance that they will not make decisions other than those now
contemplated. The Company is subject to political risks and operational risks
identified in documents filed with the Securities and Exchange Commission,
including changing and depressed oil prices, unsuccessful drilling results,
change of government and political unrest in its main area of operations.
CONTACT: Investors, Janus Investor Relations, +1-403-693-0100, for
Tracer Petroleum Corporation; or Tracer Petroleum Corporation,
+1-403-290-1676, or fax, +1-403-264-5285, or tracerinfo@tracerpetroleum.com.
SOURCE Tracer Petroleum Corporation
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CONTACT:
Investors, Janus Investor Relations,
+1-403-693-0100, for Tracer Petroleum Corporation; or Tracer
Petroleum Corporation, +1-403-290-1676, or fax, +1-403-264-5285,
or tracerinfo@tracerpetroleum.com
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