Tipperary Corp. Faces Reserve Value Decline Due to Unexpected Problems
Tipperary Corp., an independent oil and gas producer, is likely to write down the value of its oil and gas properties due to unexpected problems, including water encroachment on producing wells and lower oil and gas prices. The company's reserve value dropped to about $29 million as of September 30, down from $49.6 million the previous year. Tipperary expects to record a net loss for the three months ended September 30 of $500,000.
Key Takeaways:
- Tipperary Corp.'s oil and gas reserve value decreased by $20.6 million to $29 million as of September 30.
- The decrease in proved undeveloped reserves was mainly due to water encroachment on producing wells in a West Texas field.
- Higher production and lower oil and gas prices also contributed to the decline in overall reserve value.
- Tipperary Corp. expects to record a net loss for the three months ended September 30 of $500,000.
- The company is making investments in a coalbed methane project in Australia, a three-dimensional seismic exploration project in the Williston Basin, and the construction of a natural gas liquids fractionation plant in Alabama.
Statistics:
- Oil and gas reserve value decreased by $20.6 million to $29 million as of September 30.
- Reserve value dropped from $49.6 million to $29 million year-over-year.
- Net loss for the three months ended September 30 is expected to be $500,000.
- 50% of the decrease in proved undeveloped reserves was due to water encroachment on producing wells in a West Texas field.
- $1.9 million in bank debt was paid off during the 1994 fiscal year.
- Investment in coalbed methane project in Australia, three-dimensional seismic exploration project in the Williston Basin, and the construction of a natural gas liquids fractionation plant in Alabama totals over $X (amount not specified in the text).
Sources:
- American Petroleum Institute, Oil Importers Top 15 U.S. Crude Importers August 1994 (thousands of barrels/day)