DALLAS, May 9 /PRNewswire-FirstCall/ -- National Energy Group, Inc.
(OTC Bulletin Board: NEGI) today announces results for the first quarter ended
March 31, 2005.
Results of Operations
On September 12, 2001 as provided in the Company's Joint Plan of
Reorganization, the Company contributed all its operating assets and oil and
gas properties excluding cash of $4.3 million to NEG Holding LLC in exchange
for an initial 50% membership interest (the "LLC Contribution"). Following
the LLC Contribution, the Company no longer directly owns oil and gas
properties and will only recognize income from accretion of the preferred
investment and fees attributable to the management and operation of NEG
Holding LLC's oil and gas properties. The income from accretion of the
preferred investment and management fees amounted to $9.9 million and
$3.3 million, respectively, for the quarter ended March 31, 2005.
For the Three Months Ended March 31, 2005
Net income of $4.3 million was recognized for the three months ended
March 31, 2005 compared with net income of $3.0 million for the comparable
2004 period.
Total revenues increased $2.7 million (25.7%) to $13.2 million for the
first quarter of 2005 from $10.5 million for the first quarter of 2004.
The Company had no oil and natural gas production during the first quarter
of 2005 or 2004 due to the LLC Contribution.
Oil and Gas Operations
NEG Holding LLC conducts its oil and gas operations through its affiliate,
NEG Operating LLC. The Company manages all of these oil and gas operations
pursuant to a management agreement with NEG Operating LLC. The Company also
manages the assets of TransTexas Gas Corporation and Panaco, Inc.
National Energy Group, Inc. is a Dallas, Texas based company.
This press release may contain projections and other forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. Any such projections or statements reflect the Company's
current views with respect to future events and financial performance. No
assurances can be given, however, that these events will occur or that such
projections will be achieved and actual results could differ materially from
those projected. A discussion of important factors that could cause actual
results to differ materially from those projected is included in the Company's
periodic reports filed with the Securities and Exchange Commission.
National Energy Group, Inc.
Summary Financial Results
(In thousands, except per share data)
Three Months Ended
March 31,
2004 2005
Results of Operations Data:
Revenues:
Accretion of Investment in NEG Holding LLC $7,904 $9,893
Management fees from affiliates 2,619 3,275
Interest income and other, net 5 10
Total revenue 10,528 13,178
Costs and expenses:
General and administrative 2,431 3,055
Interest expense 3,485 3,485
Total costs and expenses 5,916 6,540
Income before income taxes 4,612 6,638
Income tax expense (1,615) (2,323)
Net income to common shareholders $2,997 $$4,315
Cash Flow Data:
Cash flow from operations (A) $(3,802) $(3,765)
Per share data:
Net income per common share, basic and
diluted $.27 $.39
Cash flow from operations (A) $(.34) $(.34)
Shares used in per share computations:
Earnings per share, basic and diluted 11,191 11,191
Cash flow per share, basic and diluted 11,191 11,191
National Energy Group, Inc.
Condensed Balance Sheet
(In thousands)
December 31, March 31,
2004 2005
Assets
Cash, cash equivalents and marketable
securities $2,488 $3,377
Other current assets 2,582 1,773
Investment in NEG Holding LLC 87,800 97,693
Deferred tax asset 19,242 16,918
Total assets $112,112 $119,761
Liabilities and Stockholders' Equity (Deficit):
Current liabilities $2,871 $6,715
Senior notes due to affiliate 148,637 148,637
Deferred gain on senior note redemption 3,737 3,227
Stockholders' deficit (43,133) (38,818)
Total liabilities and stockholders' equity
(deficit) $112,112 $119,761
(A) Cash flow from operations is shown before changes in working capital
accounts.
The following is NEG Holding's reconciliation of net income (loss) to
EBITDA.
NEG Holding LLC
Reconciliation of Net Income (Loss) to EBITDA
For the Three Months Ended March 31, 2004 and 2005
(in millions)
Three Months Ended March 31,
2004 2005
Net income (loss) $14.1 $(11.1)
Interest expense 0.5 0.7
Interest income and other (0.1) 0.2
Change in fair market value of
derivative contract (2.7) 22.6
Depreciation, depletion and amortization 5.5 6.5
Accretion of asset retirement obligation 0.1 0.2
EBITDA $17.4 $19.1
EBITDA - Earnings (including interest income and excluding discontinued
operations, extraordinary items, charges resulting from changes in accounting
and significant nonrecurring revenues and expenses and reorganization items)
before interest expense, income taxes, depletion, depreciation and
amortization, unrealized gains and losses from marking to market future oil
and natural gas derivatives, and the provision for impairment of oil and
natural gas properties. EBITDA is not a measure of cash flow as determined by
generally accepted accounting principles. EBITDA information has been
included in this document because EBITDA is a measure used by certain
investors in determining historical ability to service indebtedness. EBITDA
should not be considered as an alternative to, or more meaningful than, net
income or cash flows as determined in accordance with generally accepted
accounting principles as an indicator of operating performance or liquidity.
SOURCE National Energy Group, Inc.
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Related links:
http://www.negx.com
CONTACT:
Bob G. Alexander, Philip D. Devlin, or
Randall D. Cooley, all of National Energy Group, Inc.,
+1-214-692-9211, or fax, +1-214-692-5055
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