Record Growth for Appalachian Based Natural Gas Company
LEXINGTON, Ky., March 24 /PRNewswire-FirstCall/ -- Daugherty Resources,
Inc. (Nasdaq: NGAS) today reported net income of $3,813,740 for 2003 on total
revenues of $27,444,433, up 227 percent from 2002 revenues of $8,404,643.
Earnings per share were $0.47 for 2003 on 8,032,647 weighted average basic
shares outstanding for the year, compared to $0.12 per share on 5,343,534
weighted average basic shares outstanding for 2002.
The Company's record financial performance was, in part, due to growth in
contract drilling revenues to $23,640,000 during 2003, up 277 percent from
2002's contract drilling revenues of $6,269,598. The company's oil and gas
production revenue increased 112 percent to $2,550,040 for 2003, benefiting
from a 51 percent increase in production volumes and higher prices for natural
gas.
"Our financial performance is directly related to the success of our
ongoing natural gas drilling initiatives," said William S. Daugherty,
President and CEO of Daugherty Resources. "We were 100 percent successful in
our drilling operations for the year, drilling 89 gross natural gas wells
(26.7680 net wells) in 2003 compared to 27 gross wells (7.5304 net wells) in
2002. Our track record as a niche Appalachian natural gas developer, along
with continued strength in natural gas prices, contributed to our ability to
raise capital for further natural gas development. With our significant
acreage position in the Appalachian Basin, we expect our drilling activities
and related production revenue to increase substantially."
On March 18, 2004, Daugherty Resources reported total proved reserves of
31,371 Mmcfe, up 9,854 Mmcfe or 46 percent from December 31, 2002. The
Company plans to fund 140 wells (42 net wells) in 2004.
A conference call will be held at 2 p.m. (EST) today to discuss year-end
results. The conference call will be a live simulcast on the Internet and can
be accessed by logging
onto http://www.firstcallevents.com/service/ajwz402378305gf12.html or the
company's web site at http://www.ngas.com . Daugherty Resources will have a
slide presentation available to augment management's formal presentation,
which will be accessible at http://www.ngas.com . A replay of the conference
call will be available at the company's web site for 60 days.
Daugherty Resources is a natural resources company focused on natural gas
development drilling and reserve growth. Based in Lexington, Kentucky, the
company specializes in developing its own geological prospects concentrated in
the Appalachian Basin. The company's financial information for 2003 is
included below. Additional information, including the company's report on
Form 10-KSB for 2003, 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.
DAUGHERTY RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
(U.S. Funds)
December 31,
ASSETS 2003 2002
Current assets:
Cash and cash equivalents $ 22,594,993 $ 7,031,307
Subscriptions receivable 2,335,009 --
Accounts receivable 503,177 328,035
Prepaid expenses and other
current assets 773,415 460,663
Loans to related parties (Note 5) 140,780 64,162
Total current assets 26,347,374 7,884,167
Bonds and deposits 99,000 41,000
Oil and gas properties (Note 3) 16,369,859 9,679,549
Property and equipment (Note 4) 2,054,088 918,855
Loans to related parties (Note 5) 517,940 711,658
Investments (Note 6) 119,081 119,081
Deferred financing costs 247,923 43,546
Goodwill (Note 7) 313,177 313,177
Total assets $ 46,068,442 $ 19,711,033
LIABILITIES
Current liabilities:
Bank loan (Note 8) -- $ 134,162
Accounts payable 1,445,603 1,094,941
Accrued liabilities 2,865,045 1,212,094
Income taxes payable 144,450 --
Customers' drilling deposits 10,162,600 6,764,200
Long term debt, current portion (Note 9) 397,722 192,341
Total current liabilities 15,015,420 9,397,738
Future income taxes 257,647 --
Long term debt (Note 9) 4,739,387 4,027,198
Total liabilities 20,012,454 13,424,936
SHAREHOLDERS' EQUITY
Capital stock (Note 10)
Authorized:
5,000,000 Preferred shares, non-cumulative, convertible
100,000,000 Common shares
Issued:
-- Preferred shares
(2002 - 558,476) -- 1,784,493
10,676,030 Common shares
(2002 - 5,505,670) 36,244,623 24,589,797
21,100 Common shares held in treasury,
at cost (23,630) (23,630)
Paid-in capital - warrants 223,086 --
To be issued:
1,403,335 Common shares 5,917,958 55,226
42,362,037 26,405,886
Deficit (16,306,049) (20,119,789)
Total shareholders' equity 26,055,988 6,286,097
Total liabilities and shareholders'
equity $ 46,068,442 $ 19,711,033
DAUGHERTY RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(U.S. Funds)
Year Ended December 31,
2003 2002 2001
REVENUE
Contract drilling $ 23,640,000 $ 6,269,598 $ 5,568,837
Oil and gas production 2,550,040 1,204,111 1,122,886
Gas transmission and
compression 1,254,393 930,934 796,992
Total revenue 27,444,433 8,404,643 7,488,715
DIRECT EXPENSES
Contract drilling 12,207,772 2,916,348 3,012,505
Oil and gas production 958,081 673,227 594,621
Gas transmission and
compression 587,644 494,525 664,371
Total direct expenses 13,753,497 4,084,100 4,271,497
GROSS PROFIT 13,690,936 4,320,543 3,217,218
OTHER INCOME (EXPENSES)
Selling, general
and administrative (7,532,554) (2,898,632) (2,678,146)
Compensation from options
and warrants (589,200) -- --
Depreciation, depletion
and amortization (911,089) (652,069) (675,559)
Interest expense (493,441) (249,267) (239,334)
Interest income 176,334 45,261 43,466
Other, net (125,149) 69,114 5,097
Total other income
(expenses) (9,475,099) (3,685,593) (3,544,476)
INCOME (LOSS)
BEFORE INCOME TAXES 4,215,837 634,950 (327,258)
Income tax expense (402,097) -- --
NET INCOME (LOSS) 3,813,740 634,950 (327,258)
DEFICIT,
beginning of year (20,119,789) (20,754,739) (20,427,481)
DEFICIT, end of year $ (16,306,049) $ (20,119,789) $ (20,754,739)
NET INCOME (LOSS) PER SHARE
Basic $ 0.47 $ 0.12 $ (0.08)
Diluted $ 0.34 $ 0.11 $ (0.08)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 8,032,647 5,343,534 4,028,703
Diluted 11,711,399 5,969,027 4,028,703
DAUGHERTY RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. Funds)
Year Ended December 31,
2003 2002 2001
OPERATING ACTIVITIES
Net income (loss) $ 3,813,740 $ 634,950 $ (327,258)
Adjustments to reconcile net
income (loss) to net cash
provided by operating activities:
Incentive bonus paid in
common shares 364,680 130,020 235,500
Compensation from options
and warrants 589,200 -- --
Contract settlement paid in
common shares 348,300 -- --
Depreciation, depletion and
amortization 911,089 652,069 675,559
Write-off of deferred
financing costs 29,786 -- --
Notes issued in kind for
interest on long term debt 104,888 -- --
Gain on sale of assets (2,695) (4,361) --
Future income taxes 257,647 -- --
Changes in assets and liabilities:
Subscriptions receivable (2,335,009) -- --
Accounts receivable (175,142) 95,324 (72,655)
Prepaid expenses and
other current assets (329,752) (258,648) (197,608)
Accounts payable 514,788 374,018 274,304
Accrued liabilities 1,804,651 418,959 (125,678)
Income taxes payable 144,450 -- --
Customers' drilling
deposits 3,398,400 3,909,500 2,295,714
Net cash provided by
operating activities 9,439,021 5,951,831 2,757,878
INVESTING ACTIVITIES
Proceeds from sale of assets 20,745 26,800 --
Purchase of property
and equipment (1,341,701) (224,533) (318,760)
Purchase of investment -- (9,827) (109,254)
Increase in bonds and deposits (58,000) -- --
Additions to oil and gas
properties, net (7,346,345) (1,366,003) (1,359,941)
Net cash used in investing
activities (8,725,301) (1,573,563) (1,787,955)
FINANCING ACTIVITIES
Net payments on short term
borrowings (134,162) (11,905) (1,029,476)
Decrease (increase) in loans
to related parties 117,100 (212,093) (175,681)
Proceeds from issuance of common
shares 9,169,346 102,500 151,360
Proceeds from issuance of
long term debt 8,236,125 693,868 2,114,367
Payments of deferred financing
costs (410,000) -- --
Payments of long term debt (2,128,443) (163,751) (189,103)
Treasury stock -- -- (23,630)
Net cash provided by
financing activities 14,849,966 408,619 847,837
CHANGE IN CASH AND CASH
EQUIVALENTS 15,563,686 4,786,887 1,817,760
CASH AND CASH EQUIVALENTS:
Beginning of year 7,031,307 2,244,420 426,660
End of year $ 22,594,993 $ 7,031,307 $ 2,244,420
SUPPLEMENTAL DISCLOSURE
Interest paid $ 442,097 $ 235,531 $ 182,294
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES
Preferred shares issued for
acquisition and debt settlement -- -- 418,785
Common shares issued in settlement
of accounts payable 315,826 155,031 60,009
Common shares issued upon
conversion of notes 4,976,913 -- --
SOURCE Daugherty Resources, Inc.
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Related links:
http://www.ngas.com
http://www.firstcallevents.com/service/ajwz402378305gf12.html
CONTACT:
Media, Teresa Barnes, +1-859-263-3948, or
Cell, +1-303-521-4080, or ngas@ngas.com, or Investors, Michael P.
Windisch, +1-859-263-3948, or fax, +1-859-263-4228, or
ngas@ngas.com, both of Daugherty Resources, Inc.
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