Oil and Gas Assets Increase 316%
LEXINGTON, Ky., March 16 /PRNewswire-FirstCall/ -- NGAS Resources, Inc.
(Nasdaq: NGAS) today reported total revenues of $47,980,285 for 2004, up 75%
from 2003 revenues of $27,444,433. Earnings per share were $0.12 for 2004 on
13,994,283 weighted average basic shares outstanding for the year, compared to
$0.46 per share on 8,032,647 weighted average basic shares outstanding for
2003.
Financial highlights for 2004 include:
* Production revenues increased 124% to $5.7 million, compared to $2.6
million in 2003
* Production volumes grew 77% to 860.7 Mmcfe, from 485.9 Mmcfe in 2003
* Contract drilling revenues increased 72% to $40.7 million, from $23.6
million in 2003
* Pre-tax income was $3.5 million
* Oil and gas assets increased 316% to $68.2 million from $16.4 million
in 2003
* Standardized measure of discounted future net cash flows from
estimated proved reserves increased 175% to $92.4 million, compared to
$33.6 million at the end of 2003
* Estimated proved oil and gas reserve volumes increased 111% to
66,074 Mmcfe
"The company grew at a record pace during 2004," commented William S.
Daugherty, President and CEO of NGAS. "We continued to implement our long-
term strategic plan by drilling 155 natural gas wells and increasing our lease
position to over 255,000 acres. We also extended our gathering systems by 59
miles, raising our total to 171 miles. Our 18-mile extension to the
Leatherwood Field is expected to be operational mid-year."
Daugherty stated, "In 2005, we plan to drill about 165 wells,
significantly extend our gathering system, increase our lease position, and
seek strategic acquisitions. These initiatives, coupled with the ongoing
integration of recently acquired properties, should position us to capitalize
on the continuing strength of natural gas."
A conference call will be held at 10:00 a.m. (EST) today to discuss 2004
results. The conference call will have a live simulcast on the Internet and
can be accessed by logging onto
http://phx.corporate-ir.net/playerlink.zhtml?c=97946&s=wm&e=1035387, where a
slide presentation will be available to highlight management's discussion
points. A replay of the conference call will be available on the Company's
website for 30 days.
NGAS Resources is an independent energy company focused on natural gas
development drilling and reserve growth. The Company changed its name from
Daugherty Resources in June 2004. Based in Lexington, Kentucky, the Company
specializes in developing its own geological prospects concentrated in the
Appalachian Basin. The Company's financial information for 2004 is provided
below. Additional information, including the Company's report on Form 10-KSB
for 2004, can be accessed on its website at http://www.ngas.com.
This release includes forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act relating to matters such as
anticipated operating and financial performance and prospects. Actual
performance and prospects may differ materially from anticipated results due
to economic conditions and other risks, uncertainties and circumstances partly
or totally outside the control of the company, including risks of production
variances from expectations, volatility of product prices, the level of
capital expenditures required to fund drilling and the ability of the company
to implement its business strategy. These and other risks are described in
the company's periodic reports filed with the United States Securities and
Exchange Commission.
NGAS RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
ASSETS 2004 2003
Current assets:
Cash $11,849,372 $22,594,993
Subscriptions receivable -- 2,335,009
Accounts receivable 2,281,715 503,177
Prepaid expenses and other
current assets 2,152,174 773,415
Loans to related parties 142,718 140,780
Total current assets 16,425,979 26,347,374
Bonds and deposits 124,650 99,000
Oil and gas properties 68,156,790 16,369,859
Property and equipment 2,668,908 2,054,088
Loans to related parties 357,175 517,940
Investments 55,454 119,081
Deferred financing costs 1,024,810 247,923
Goodwill 313,177 313,177
Total assets $89,126,943 $46,068,442
LIABILITIES
Current liabilities:
Accounts payable 3,381,726 1,445,603
Accrued liabilities 3,537,576 2,865,045
Income taxes payable -- 144,450
Customers' drilling deposits 12,652,001 10,162,600
Long term debt, current portion 121,247 397,722
Total current liabilities 19,692,550 15,015,420
Future income taxes 2,053,432 257,647
Long term debt 25,870,498 4,739,387
Deferred compensation 368,935 --
Total liabilities 47,985,415 20,012,454
SHAREHOLDERS' EQUITY
Capital stock
Authorized:
5,000,000 Preferred shares,
non-cumulative, convertible
100,000,000 Common shares
Issued:
15,605,208 Common shares
(2003 - 10,676,030) 54,929,887 36,244,623
21,100 Common shares held in
treasury, at cost (23,630) (23,630)
Paid-in capital -
options and warrants 1,796,504 1,140,321
To be issued:
10,070 Common shares
(2003 - 1,403,335) 50,350 5,917,958
56,753,111 43,279,272
Deficit (15,611,583) (17,223,284)
Total shareholders' equity 41,141,528 26,055,988
Total liabilities and
shareholders' equity $89,126,943 $46,068,442
NGAS RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
Year Ended December 31,
2004 2003 2002
REVENUE
Contract drilling $40,693,850 $23,640,000 $6,269,598
Oil and gas production 5,711,500 2,550,040 1,204,111
Gas transmission and
compression 1,574,935 1,254,393 930,934
Total revenue 47,980,285 27,444,433 8,404,643
DIRECT EXPENSES
Contract drilling 29,620,335 12,207,772 2,916,348
Oil and gas production 2,413,375 958,081 673,227
Gas transmission and
compression 1,012,914 587,644 494,525
Total direct expenses 33,046,624 13,753,497 4,084,100
GROSS PROFIT 14,933,661 13,690,936 4,320,543
OTHER INCOME (EXPENSES)
Selling, general and
administrative (9,848,139) (7,532,554) (2,898,632)
Options, warrants and
deferred compensation (743,096) (742,800) --
Depreciation, depletion
and amortization (1,886,965) (911,089) (652,069)
Interest expense (682,235) (493,441) (249,267)
Interest income 297,138 176,334 45,261
Gain on sale of assets 1,542,607 2,695 4,361
Other, net (107,515) (127,844) 64,753
Total other income
(expenses) (11,428,205) (9,628,699) (3,685,593)
INCOME BEFORE INCOME TAXES 3,505,456 4,062,237 634,950
Income tax expense 1,893,755 402,097 --
NET INCOME 1,611,701 3,660,140 634,950
DEFICIT, beginning of year (17,223,284) (20,883,424) (21,518,374)
DEFICIT, end of year $(15,611,583) $(17,223,284) $(20,883,424)
NET INCOME PER SHARE
Basic $0.12 $0.46 $0.12
Diluted $0.10 $0.33 $0.11
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 13,994,283 8,032,647 5,343,534
Diluted 16,467,584 11,711,399 5,969,027
NGAS RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
2004 2003 2002
OPERATING ACTIVITIES
Net income $1,611,701 $3,660,140 $634,950
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Incentive bonus paid in
common shares 674,905 364,680 130,020
Options, warrants and
deferred compensation 743,096 742,800 --
Contract settlement
paid in common shares -- 348,300 --
Depreciation, depletion
and amortization 1,886,965 911,089 652,069
Write-down of investments 63,627 -- --
Write-off of deferred
financing costs -- 29,786 --
Notes issued in kind for
interest on long term debt 74,036 104,888 --
Gain on sale of assets (1,542,607) (2,695) (4,361)
Future income taxes 1,795,785 257,647 --
Changes in assets and
liabilities:
Subscriptions receivable 2,335,009 (2,335,009) --
Accounts receivable (1,778,538) (175,142) 95,324
Prepaid expenses and
other current assets (1,378,759) (329,752) (258,648)
Accounts payable 2,117,643 514,788 374,018
Accrued liabilities 672,531 1,804,651 418,959
Income taxes payable (144,450) 144,450 --
Customers' drilling
deposits 2,489,401 3,398,400 3,909,500
Net cash provided by operating
activities 9,620,345 9,439,021 5,951,831
INVESTING ACTIVITIES
Proceeds from sale of
assets 2,187,400 20,745 26,800
Purchase of property and
equipment (1,097,568) (1,341,701) (224,533)
Purchase of investment -- -- (9,827)
Increase in bonds and deposits (25,650) (58,000) --
Additions to oil and
gas properties (53,755,431) (7,346,345) (1,366,003)
Net cash used in investing
activities (52,691,249) (8,725,301) (1,573,563)
FINANCING ACTIVITIES
Net payments on
short term borrowings -- (134,162) (11,905)
Decrease (increase) in loans
to related parties 158,827 117,100 (212,093)
Proceeds from issuance of
common shares 10,252,391 9,169,346 102,500
Proceeds from issuance of
long term debt 22,679,258 8,236,125 693,868
Payments of deferred
financing costs (684,206) (410,000) --
Payments of long term debt (80,987) (2,128,443) (163,751)
Net cash provided by
financing activities 32,325,283 14,849,966 408,619
Change in cash (10,745,621) 15,563,686 4,786,887
Cash, beginning of year 22,594,993 7,031,307 2,244,420
Cash, end of year $11,849,372 $22,594,993 $7,031,307
SUPPLEMENTAL DISCLOSURE
Interest paid 601,719 $442,097 $235,531
Income taxes paid 659,450 -- --
SUPPLEMENTAL SCHEDULE OF NON-CASH
FINANCING ACTIVITIES
Common shares issued for
accounts payable 181,520 315,826 155,031
Common shares issued upon
conversion of notes 1,688,590 4,976,913 --
SOURCE NGAS Resources
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Related links:
http://www.ngas.com
CONTACT:
Media Contact - Teresa Barnes,
+1-859-263-3948, or cell, +1-303-521-4080, ngas@ngas.com, or
Investor Relations Contact - Michael P. Windisch,
+1-859-263-3948, or fax, +1-859-263-4228, ngas@ngas.com, both of
NGAS Resources, Inc.
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