Bridgevale progress hinges on Texas efforts

Press, 20 June 1984, Page 32

Bridgevale progress hinges on Texas efforts

The results of Bridgevale Mining, Ltd this year will depend on continuing efforts to develop oil and gas operations in Texas, its chairman, Mr A. J. Wakefield, says in the company’s annual report. Last year was “a period of consolidation of activities and the company is now well placed to take advantage of opportunities as they occur,” Mr Wakefield says.

Bridgevale is working towards exploration drilling as part of three different joint ventures in Texas. It has interests in seven wells producing oil or gas last year.

In the year to last December 31, Bridgevale had a group net profit after tax and extraordinaries of $85,692, compared with a loss of $549,669 in the previous year. The latest result was after deduction of $42,944 as the group’s share of losses incurred by Coal and Energy New Zealand, Ltd, in which Bridgevale last year increased its shareholding to 4.4 million shares, or 22.2 per cent. Bridgevale’s interests in New Zealand coal mining are now all held by Coal and Energy, which had an

over-all loss for last year of $194,403. That result was below expectations at the start of 1983, but the year was still one of “sound progress” in the establishment of Coal and Energy, Mr Wakefield says. Bridgevale’s group revenue last year was $237,319, up from $116,826 in 1983. The increase came mainly from the sale of investments $118,479 held in Australian public company shares, at prices higher than book value. The funds from the sale are now on short term interest bearing deposit in New Zealand and overseas.

The group’s share of revenue from oil and gas joint ventures after United States taxes, was $42,227, down from $50,885 in 1982. Extraordinary items dropped to $16,031, from $469,080 the year before, and this included $15,448 in the costs of oil and gas leases written off ($466,277, 1982).

These write-off costs resulted from the abandonment of the only well Bridgevale participated in the drilling of last year. It was the Stacy No. 1 well on a lease acquired adjoining the Baker lease, in Texas.

“Although the geological forecasts were most promising, the well was dry and was abandoned before the completion stage,” Mr Wakefield says.

The cost of this was limited to the write-off of lease acquisition costs. Under a farm-out agreement negotiated by Bridgevale, the full cost of drilling the well to completion stage was borne by the other parties. The group has attempted to launch further work in the South Broyles and Fulton leases held by the Patmaree Joint Venture in which Bridgevale has a free-carry 10 per cent interest.

No drilling took place on these leases last year. Mr Wakefield says Bridgevale has attempted, so far unsuccessfully, to encourage two Australian public companies which are shareholders in Patmaree Developments (Australia), Pty, Ltd to make financial arrangements for work on the leases. That company holds the working interest in the joint venture. The venture has four producing wells, but only one of them has achieved payback. Mr Wakefield says two others, both oil producers,

are expected to achieve payback this year. The Wylie Hearn Joint Venture in which the Bridgevale group has a 20 per cent free-carry interest has two wells producing oil from the Wylie Hearns lease. However, neither have yet achieved payback. The Baker Joint Venture in which Bridgevale has a 25 per cent working interest has one producing well. This well, which is a gas producer, was shut in for two periods last year because of surpluses of available gas in West Central Texas.

This year, it is intended to re-perforate this well into another pay zone so that it will then be an oil and gas producer. The North Broyles Joint Venture, in which Anztex Corporation USA and Bridgevale have a total interest of 37.5 per cent, has two producing wells which were in continuous production last year. Bridgevale also holds the G. L. Proctor lease of 117 acres of Runnels County, West Central Texas. This lease adjoins several leases on which there are successful oil producers and it is expected that a joint venture will be arranged to drill on this lease this year.