Oil and Gas Revenues Increased 263%
LEXINGTON, Ky., May 12 /PRNewswire-FirstCall/ -- NGAS Resources, Inc.
(Nasdaq: NGAS) today reported total revenues of $20.2 million for the three
months ended March 31, 2005, up 30% from the same period in 2004. Earnings
per fully diluted share were $0.04 for first quarter 2005 compared to $0.05
per fully diluted share in first quarter 2004.
Operational and Financial Highlights for 1Q 2005:
- Production volumes were up 175% to 396.8 Mmcfe, compared to 144.1 Mmcfe
in 1Q 2004
- 57 gross (16.7549 net) wells drilled, all successfully
- 29 miles of pipeline added to our gathering system
- Oil and gas revenues increased 263% to $2.9 million, from $791,000 in 1Q
2004
- Discretionary cash flow increased 64% to $2.4 million from $1.5 million
1Q 2004
- Capital expenditures totaled $7.3 million
"During the quarter we experienced record production growth, and revenue
of $20 million was a new quarterly record for the company as well," commented
William S. Daugherty, President and CEO of NGAS. "Last year's fourth quarter
acquisition of the Stone Mountain Energy assets was a significant contributor
to this quarter's strong production growth, along with ongoing drilling
success. As a result, I am also pleased to report that oil and gas production
revenue increased 263% in the quarter. Additionally, progress on our 23-mile
gathering system for our key Leatherwood Field continues with 15 miles now
completed. Production from this field is targeted to commence in late third
quarter 2005."
Daugherty added, "We are excited about our growth opportunities for 2005
and beyond. For the current year, we plan to accelerate development of our
reserve base and production capabilities. Total capital expenditures of $30
million are planned. We plan to drill about 170 wells and expect to increase
average daily production to 7,000 mcfe by year end. We will also
significantly extend our gathering system, increase our lease position, and
continue to seek strategic acquisitions. We believe these initiatives, as
well as the groundwork we laid in 2004, position us to have a significant role
in the development of the southern Appalachian Basin."
A conference call will be held at 11:00 a.m. (EDT) today to discuss 1Q
2005 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=1064604, 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 with its main operations in the
Appalachian Basin, primarily eastern Kentucky. The Company changed its name
from Daugherty Resources in June 2004. Additional information, including the
Company's report on Form 10-Q for 1Q 2005, 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. funds)
March 31, December 31,
2005 2004
ASSETS (Unaudited)
Current assets:
Cash $16,703,019 $11,849,372
Accounts receivable 2,806,950 2,281,715
Prepaid expenses and other current assets 2,149,194 2,152,174
Loans to related parties (Note 4) 124,657 142,718
Total current assets 21,783,820 16,425,979
Bonds and deposits 210,045 124,650
Oil and gas properties (Note 2) 74,536,635 68,156,790
Property and equipment (Note 3) 2,349,064 2,668,908
Loans to related parties (Note 4) 281,413 357,175
Investments (Note 5) 55,454 55,454
Deferred financing costs (Note 6) 1,406,240 1,024,810
Goodwill (Note 7) 313,177 313,177
Total assets $100,935,848 $89,126,943
LIABILITIES
Current liabilities:
Accounts payable 4,640,170 3,381,726
Accrued liabilities 5,905,094 3,537,576
Customers' drilling deposits (Note 8) 11,677,600 12,652,001
Long term debt, current portion (Note 9) 41,917 121,247
Total current liabilities 22,264,781 19,692,550
Future income taxes 2,671,933 2,053,432
Long term debt (Note 9) 31,948,195 25,870,498
Deferred compensation 477,973 368,935
Total liabilities 57,362,882 47,985,415
SHAREHOLDERS' EQUITY
Capital stock (Note 10)
Authorized:
5,000,000 Preferred shares,
non-cumulative, convertible
100,000,000 Common shares
Issued:
15,936,691 Common shares (December 31,
2004 - 15,605,208) 56,385,121 54,929,887
21,100 Common shares held in
treasury, at cost (23,630) (23,630)
Paid-in capital - options
and warrants 1,818,616 1,796,504
To be issued:
61,990 Common shares (December 31,
2004 - 10,070) 267,376 50,350
58,447,483 56,753,111
Deficit (14,874,517) (15,611,583)
Total shareholders' equity 43,572,966 41,141,528
Total liabilities and
shareholders' equity $100,935,848 $89,126,943
NGAS RESOURCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(U.S. funds) (Unaudited)
Three Months Ended
March 31,
2005 2004
REVENUE
Contract drilling $16,677,000 $14,326,125
Oil and gas production 2,875,788 791,289
Gas transmission and compression 700,128 448,468
Total revenue 20,252,916 15,565,882
DIRECT EXPENSES
Contract drilling 12,417,991 10,135,062
Oil and gas production 1,013,537 285,312
Gas transmission and compression 410,784 408,866
Total direct expenses 13,842,312 10,829,240
GROSS PROFIT 6,410,604 4,736,642
OTHER INCOME (EXPENSES)
Selling, general and administrative (3,506,825) (3,185,518)
Options, warrants and deferred compensation (252,608) (30,074)
Depreciation, depletion and amortization (968,323) (206,111)
Interest expense (508,753) (89,168)
Interest income 37,740 86,862
Other, net 143,732 7,746
Total other income (expenses) (5,055,037) (3,416,263)
INCOME BEFORE INCOME TAXES 1,355,567 1,320,379
INCOME TAX EXPENSE
Current -- 110,416
Future 618,501 442,722
618,501 553,138
NET INCOME 737,066 767,241
DEFICIT, beginning of period (15,611,583) (17,223,284)
DEFICIT, end of period $(14,874,517) $(16,456,043)
NET INCOME PER SHARE
Basic $0.05 $0.06
Diluted $0.04 $0.05
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic 15,689,872 12,052,183
Diluted 17,463,618 15,633,855
NGAS RESOURCES, INC.
Discretionary Cash Flow Reconciliation
Discretionary cash flow represents net income, as determined under
generally accepted accounting principles ("GAAP"), with certain non-cash items
added back. Although a non-GAAP measure, discretionary cash flow is widely
accepted as a financial indicator of an oil and gas company's ability to
generate cash that can be used to internally fund exploration and development
activities and to service debt. This measure may also be used in the
valuation, comparison, rating and investment recommendations for companies in
the oil and gas exploration and production industry. Discretionary cash flow
is not a measure of financial performance under GAAP and should not be
considered as an alternative to cash flows from operating, investing, or
financing activities or as an indicator of cash flows or measure of liquidity.
Three Months Ended
March 31,
2005 2004
NET INCOME $737,066 $767,241
DD&A* 1,046,555 253,129
DEFERRED TAXES 616,501 442,722
DISCRETIONARY CASH FLOW $2,400,122 $1,463,092
* Represents non-cash charges for depreciation, depletion and amortization
and includes depreciation allocated to direct expenses.
SOURCE NGAS Resources
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Related links:
http://www.ngas.com
CONTACT:
Investor Relations, Michael P. Windisch, CFO
of NGAS Resources, Inc., 859-263-3948, or fax, 859-263-4228, or
ngas@ngas.com
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