NEP
Press Release Source: China North East Petroleum Holdings Ltd. On Tuesday March 15, 2011, 11:45 pm
HARBIN, China and NEW YORK, March 15, 2011 /PRNewswire-Asia-FirstCall/ -- China North East Petroleum Holdings Limited (the "Company") (NYSE Amex: NEP), a leading independent oil producing and oilfield services company in Northern China, today announced consolidated financial results for the fourth quarter and full year ended December 31, 2010.
Revenue for the fourth quarter of 2010 totaled $23.0 million from $20.0 million in the 2010 third quarter and $30.0 million in the prior year fourth quarter period. Fourth quarter revenue growth was impacted by the third quarter impact related to severe flooding that washed out roads disabling the passage of oil delivery trucks. Oil production was also slightly impacted by the natural depletion of production output among existing wells. Total oil production in the 2010 fourth quarter was 161,279 barrels, a 19% increase sequentially from 135,473 barrels in the 2010 third quarter. The total number of wells in production as of December 31, 2010 was 295 compared to 289 wells in production as of December 31, 2009. The average per barrel oil price for the fourth quarter was approximately US$77, an 11% increase from US$69 for the fourth quarter of 2009.
The Company's oil drilling and service subsidiary, Tiancheng contributed $10.1 million of the revenue in the fourth quarter 2010 compared to $10.1 million in the 2010 third quarter and $13.6 million in the fourth quarter 2009. Tiancheng completed drilling contracts for 35 wells with total drilling depth of 61,935 meters (203,199 feet) in the fourth quarter of 2010. Tiancheng performed standard rig and equipment repair and maintenance work at year end that impacted drilling performance in the fourth quarter. Drilling activity was also lower in the fourth quarter as Tiancheng's customers continued to be impacted by previously reported flooding in the third quarter and therefore focused more on repairing and restoring oil production in the fourth quarter period. Tiancheng has experienced a resumption of regular drilling activity in the 2011 first quarter.
As of December 31, 2010, the Company had $61.0 million in cash and cash equivalents, compared to $28.7 million as of December 31, 2009. Total assets were $150.5 million and total liabilities were $28.0 million and stockholders' equity was $122.5 million as of December 31, 2010.
Full Year 2010 Results
Net sales for full year 2010 were $99.5 million compared to $64.7 million for 2009. In the twelve-month period, the Company drilled 6 new oil wells in the four oilfields which are owned by the Company. The Company's crude oil production for the full year 2010 totaled 723,154 barrels, a 20% decrease from 908,126 barrels in 2009. Oil prices averaged approximately $75.49 per barrel, which represents a 35% increase over prior year period levels of approximately $55.97 per barrel.
Gross profit for FY2010 was $60.8 million, a 43.1% increase from $42.5 million last year. Gross margin was 61.0% compared to 65.7% in FY2009.
Operating expenses for FY2010 were $7.8 million compared to $17.7 million in the prior year period. This 56% decrease was primarily due to a $13.8 million decrease in impairment of oil properties offset by higher consulting fees and overhead expenses associated with new drilling operations when compared to the prior year period.
