Newspaper article THE JOURNAL RECORD

Beard Expects 1990 Loss; Plans Profit Again in 1991

Newspaper article THE JOURNAL RECORD

Beard Expects 1990 Loss; Plans Profit Again in 1991

Article excerpt

A 1990 loss is anticipated for Beard Oil Co. of Oklahoma City due to effects of a $60 million private debenture sale last year, but a return to positive earnings is predicted for next year.

Chairman W.M. Beard said Wednesday front-end investments into expanded waterflood projects made possible by the $60 million private debenture placement and high interest costs associated with the sale will cause a loss this year.

However, he said at the company's annual stockholders meeting that as new waterflood investments become productive, the company should return to earnings.

In 1989, Beard Oil posted its first positive earnings following four years of losses. Last year, the company reported $74,000 in net income. It also became very liquid, retiring $14.9 million in bank debt and ending the year with $43 million in working capital as a result of the private debenture sale.

"In 1990, we will be at a loss," Beard said. "We do anticipate a turnaround, though, late this year or early next year as we get a response from (waterflood projects) and carbon dioxide.

"You can be a slow starter. It just matters how you finish the race."

The company's situation, Beard said, is analogous to a henhouse full of eggs that have not hatched.

In anticipation of the sale, which boosted Beard Oil's capital budget by $35.1 million, the company added an estimated 5 million barrels to its probable oil reserves last year. Future net income on those reserves are estimated at $50.3 million, or a $29.1 million present value at a 10 percent discount.

A Mid-Continent Waterflood Division also was established, headed by Robert A. …

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