Tengasco Announces First Quarter 2008 Financial Results
May 14, 2008 16:13:47 (ET)
KNOXVILLE, TN, May 14, 2008 (MARKET WIRE via COMTEX) -- Tengasco, Inc. (TGC, Trade ) announced today its financial results for the quarter ended March 31, 2008. The Company realized a net income attributable to common shareholders of $5,812,011 or $0.10 per share of common stock during the first quarter of 2008, compared to a net loss in the first quarter of 2007 to common shareholders of $(209,165) or $(0.004) per share of common stock. Of the ten cents per share earnings, approximately eight cents are the result of the recognition of a deferred tax asset related to prior period net operating losses in the amount of $5,227,000 to offset future income tax liability.
The Company recognized $3,305,720 in revenues during the first quarter of 2008 compared to $1,772,400 in the first quarter of 2007. Production for the first quarter of 2008 of 47,654 gross barrels in Kansas with about 33,800 barrels being net to the Company's interest led to record revenues to the Company for a single quarter. Increased production continued in April 2008 with a monthly production of 17,234 barrels in Kansas.
The increase in revenues was due principally to an increase in oil prices in 2008 and a 5,346 net barrel increase in oil sales during the first three months of 2008. Oil prices in the first quarter of 2008 averaged $91.36 per barrel as compared to $52.61 per barrel in the first quarter of 2007. The Company's revenue in the first quarter of 2007 had been adversely affected by inclement weather in Kansas and lower oil prices compared to the 2008 period. The Company's operating income was $885,011 in the first quarter of 2008 compared to a ($209,165) loss in operating income in the 2007 period. Production costs and taxes in the first quarter of 2008 increased to $1,335,021 from $963,130 in the first quarter of 2007 due to increased workovers to increase production, increased taxes, and overall cost increases of supplies in the industry.
The Company drilled the final well of its 10 well program in Kansas in the first quarter of 2008. The Company recently drilled 3 wells: The McElhaney A well was completed on April 22, 2008 and has produced 444 barrels to date or 30 barrels per day. The Von-lintel well, an exploratory wildcat well, was not successful and has been plugged and abandoned. This week the third well, the Ruder, was drilled and completion efforts will begin by the end of May 2008.
The Company's six-well Kansas drilling program is nearing the agreed point where the Company's interest in these wells will increase. The Company anticipates that this "flip" point will be reached in May 2008, and the Company will begin receiving an additional 85% of revenues from these wells, in addition to the 5% interest currently received by the Company, resulting in an approximate increase in revenues with June 2008 production of about $50,000 per month at current volumes and prices.
In the first quarter of 2008, the Company recorded a deferred tax asset relating to all of its remaining net operating loss carry forwards to offset tax liability of $5,227,000 in future periods, and recorded income tax expense of $300,000 for the first quarter net income. In total, the Company has now recognized a deferred tax asset relating to all of its net operating losses to offset a total of $7,327,000 in federal income tax liability. No existing NOLs remain to be recorded in any future quarter.
Jeffrey R. Bailey, Chief Executive Officer, said, "We are extremely pleased with the two cents per share income to our shareholders for the quarter (excluding the recognition of a tax asset based on our NOLs). The Company experienced a very successful quarter with net operating income of $885,011 or about a 27% profit."
Mr. Bailey continued: "Our methane project in Tennessee remains scheduled for a summer 2008 startup of commercial operations. All of the treatment equipment has been delivered and set up on site, and we await arrival of the compressors and related equipment, as well as completion of the pipeline. These projects appear to be progressing as anticipated. With May 2008 gas prices in the $11.00/MMBtu range, we expect this new, alternative green-energy gas source to provide immediate income and, to the extent it succeeds, to assist in acquisition of additional methane projects."
Mr. Bailey concluded: "In our Gulf Coast operations, we have qualified Tengasco as an operator under federal Minerals Management Service standards and are proceeding with our duties under management agreement to operate and manage properties owned by Hoactzin Partners, L.P. We are looking at opportunities there to participate in workovers or new drilling up to 15% of Hoactzin's interest."
Forward-looking statements made in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risk and uncertainties which may cause actual results to differ from anticipated results, including risks associated with the timing and development of the Company's reserves and projects as well as risks of downturns in economic conditions generally, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.
Contact
Tengasco, Inc.
Jeffrey R. Bailey
CEO
865-675-1554
