Shares outstanding: 3.5m
SE June 04: $4.79m vs $3.42m year ago
Rev 9mo June 04: $6.29m vs $6m year ago
Net Inc 9mo June 04: $1.38m vs $894,000 year ago
Net Inc per sh 9mo June 04: $.38 vs $.26 year ago
Prices paid for oil and gas production during the 1st 9mo for TREK were at an average well below current well head prices for both the past number of weeks and the remaining weeks of this 4th qtr. Thus 4th qtr numbers may be well in excess of net inc for the 3rd qtr, which was net inc of $.14 per sh. At $.38 so far for the 9mo it is my best guess we will see at least $.50 per sh for year and maybe $.55......my opinion only, which will double or better the $.26 net inc last year. Same forces should have positive effect on revenue numbers. Now, when the 4th qtr release comes out sometime before the end of the calendar year if this price is still at this ridiculous level it is going to MOVE.
From last 10q then outlook from T Boone Pickens, best oilman in the biz:
We are an independent energy company engaged in oil and natural gas exploitation, acquisition and exploration activities in conventional producing areas of the United States. Our reserves and production operations are primarily concentrated in Texas and Oklahoma. Our business strategy emphasizes refurbishing and improving the production potential of properties that already produce oil and natural gas, along with exploitation through development of non-producing and undeveloped reserves on existing properties. We focus on maintaining a balanced portfolio of lower-risk reserves to provide a cash flow foundation for our exploitation, acquisition and exploration activities.
We generate revenues by the sale of the oil and natural gas that we produce from our reserves. Our results of operations are significantly impacted by the prices of oil and natural gas, which are volatile. The prices we receive for our oil vary from New York Mercantile Exchange ("NYMEX") prices based on the location and quality of the crude oil. The prices we receive for our natural gas are based on Henry Hub prices reduced by transportation expenses, regional basis differentials and processing fees.
Our primary expenses consist of lease operating expenses, general and administrative expenses and depreciation, depletion and amortization expenses. Lease operating expenses include pumpers' salaries, utilities, maintenance, workovers, production taxes, transportation fees and other costs necessary to operate our producing properties. General and administrative expenses consist primarily of salaries and related benefits, office rent, accounting and legal fees, consultants, systems costs and other administrative costs incurred in our Dallas, Texas headquarters. Depreciation, depletion and amortization expenses relate to the realization of the capitalized costs of our oil and natural gas properties as each unit of production is produced.
During the three months ended June 30, 2004, we continued to experience a favorable price environment for our production. Cash flow from operations served as our primary source of liquidity during this period, and we were able to make additional principal repayments on our credit facility. For the remainder of fiscal 2004, we plan to evaluate additional drilling and expansion activities to the extent that we have sufficient cash flow to do so..
Our Results of Operations
Comparison of the Three Months Ended June 30, 2004 and 2003
Net income for the three months ended June 30, 2004 was $510,471, or $0.10 per diluted share, compared to a net income of $290,897, or $0.06 per diluted share for the same period of the prior year. Our results of operations for the second quarter of fiscal 2004 were favorably impacted by higher oil and natural gas prices, and lower lease operating expenses. Offsetting those effects were lower oil and natural gas volumes, higher general and administrative expenses, higher depletion expense, and higher interest expense.
Oil and natural gas sales were $2.1 million during the three months ended June 30, 2004, compared to $1.9 million for the comparable period in 2003. This increase was mainly due to higher oil and natural gas prices, offset in part by decreased oil and natural gas volumes. Average quarterly prices were $37.63 per barrel ("Bbl") of oil and $5.75 per thousand cubic feet ("Mcf") of natural gas for this three-month period in fiscal 2004, compared to $28.73 per Bbl and $4.88 per Mcf during the corresponding period in fiscal 2003.
Net income for the nine months ended June 30, 2004 was $1,384,155, or $0.28 per diluted share, compared to $894,396, or $0.18 per diluted share for the same period in the prior year. Our results of operations for the first three quarters of fiscal 2004 were favorably impacted by higher oil and natural gas prices, as well as the absence of losses on derivative contracts, which were in place in fiscal 2003. Further, the adoption of SFAS 143, "Asset Retirement Obligations," resulted in a $60,000 one-time charge in the first quarter of fiscal 2003 as a cumulative effect of change in accounting principle. Otherwise, slightly lower lease operating costs and interest expense offset the lower oil and natural gas volumes, slightly higher depletion and general and administrative expenses.