Production Volumes Up 90% for Appalachian Based Natural Gas Company
LEXINGTON, Ky., Aug. 12 /PRNewswire-FirstCall/ -- NGAS Resources, Inc.
(Nasdaq: NGAS) today reported a 116% jump in revenues to $8,327,169 in the
second quarter of 2004 from $3,851,469 in the same quarter last year. Net
income for the current quarter was $208,383, or $0.02 per share on 13,877,212
weighted average basic shares outstanding, compared to a $0.01 loss per share
in the second quarter last year.
Highlights for the quarter and six months ended June 30, 2004 include:
- Production revenues reached $986,724, up 84% from Q2 in 2003, with a
90% gain in production volumes to 182,317 Mcfe
- 25 gross (7.6311 net) natural gas wells drilled in Q2, all successfully
- Contract drilling revenues increased to $7,040,250, up 133% from Q2 in
2003
- Average price for natural gas production continued strong at $5.50 per
Mcf
- Pre-tax profit was $458,822, compared to a pre-tax loss of $69,882 in
Q2 of 2003
- 24 miles of new gathering lines were added in Q1 and Q2 of 2004
"In the first half of the year, we continued our 100% success rate on a
total of 78 natural gas wells, including 25 new wells in the second quarter,"
said William S. Daugherty, President and CEO of NGAS. "This includes 32 new
wells drilled in our Straight Creek and Leatherwood Fields. We increased our
share in development wells from 25% to 30% and maintained our 67%
participation in exploratory wells."
NGAS extended its gathering systems by an additional 24 miles, including a
four-mile, eight-inch steel gathering line that connects its Straight Creek
Field to the Duke Energy East Tennessee gas system. Work also began on an
18-mile extension of that system to connect new wells in the Leatherwood
Field. The Company's 100% ownership of these systems gives it access to major
new natural gas markets and competitive advantages in acquiring drilling
rights on nearby acreage.
A conference call will be held at 10:00 a.m. (EDT) today to discuss second
quarter results. The conference call will have a live simulcast on the
Internet and can be accessed by logging onto
http://www.firstcallevents.com/service/ajwz409623136gf12.html, 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
60 days.
NGAS Resources is a natural resources 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, NGAS
Resources specializes in developing its own geological prospects concentrated
in the Appalachian Basin. Interim financial information for the Company is
provided below. Additional information, including the Company's report on
Form 10-QSB for the second quarter of 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 ongoing drilling initiatives 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
June 30, December 31,
2004 2003
ASSETS (Unaudited)
Current assets:
Cash $22,514,081 $22,594,993
Subscriptions receivable -- 2,335,009
Accounts receivable 935,446 503,177
Prepaid expenses and other current assets 996,091 773,415
Loans to related parties 165,822 140,780
Total current assets 24,611,440 26,347,374
Bonds and deposits 124,400 99,000
Oil and gas properties 24,731,425 16,369,859
Property and equipment 1,957,617 2,054,088
Loans to related parties 416,244 517,940
Investments 119,081 119,081
Deferred financing costs 100,737 247,923
Goodwill 313,177 313,177
Total assets $52,374,121 $46,068,442
LIABILITIES
Current liabilities:
Accounts payable $2,479,376 $1,445,603
Accrued liabilities 2,910,327 2,865,045
Income taxes payable 188,756 144,450
Customers' drilling deposits 6,152,600 10,162,600
Long term debt, current portion 391,516 397,722
Total current liabilities 12,122,575 15,015,420
Future income taxes 654,418 257,647
Long term debt 3,011,944 4,739,387
Deferred compensation 124,564 --
Total liabilities 15,913,501 20,012,454
SHAREHOLDERS' EQUITY
Capital stock
Authorized:
5,000,000 Preferred shares, non-cumulative, convertible
100,000,000 Common shares
Issued:
14,446,033 Common (12/04 - 10,676,030) 51,453,007 36,244,623
21,100 Common held in treasury, at
cost (23,630) (23,630)
Paid-in capital -
options/warrants 1,228,553 1,140,321
To be issued:
10,070 Common (12/03 - 1,403,335) 50,350 5,917,958
52,708,280 43,279,272
Deficit (16,247,660) (17,223,284)
Total shareholders' equity 36,460,620 26,055,988
Total liabilities and shareholders' equity $52,374,121 $46,068,442
NGAS RESOURCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
REVENUE
Contract drilling $7,040,250 $3,025,000 $21,366,375 $11,058,000
Oil and gas production 986,724 537,286 1,778,013 1,066,290
Gas transmission
and compression 300,195 289,183 748,663 558,034
Total revenue 8,327,169 3,851,469 23,893,051 12,682,324
DIRECT EXPENSES
Contract drilling 5,236,941 1,283,184 15,341,589 4,678,349
Oil and gas production 392,379 104,930 670,087 420,944
Gas transmission
and compression 114,326 146,573 514,192 254,762
Total direct expenses 5,743,646 1,534,687 16,525,868 5,354,055
GROSS PROFIT 2,583,523 2,316,782 7,367,183 7,328,269
OTHER INCOME (EXPENSES)
Selling, general and
administrative (1,744,546) (1,505,514) (4,930,064) (4,197,729)
Compensation cost (202,972) (589,200) (233,046) (742,800)
Depreciation, depletion
and amortization (255,475) (194,080) (508,604) (373,160)
Interest expense (107,535) (122,180) (196,703) (204,633)
Interest income 81,344 28,707 168,206 57,535
Other, net 104,483 (4,397) 112,229 (8,152)
Total other
income (expenses) (2,124,701) (2,386,664) (5,587,982) (5,468,939)
INCOME (LOSS) BEFORE
INCOME TAXES 458,822 (69,882) 1,779,201 1,859,330
INCOME TAX EXPENSE
Current 38,743 26,555 149,159 275,369
Future 211,696 -- 654,418 489,545
Benefit realized on
loss carried forward -- (26,555) -- (764,914)
250,439 -- 803,577 --
NET INCOME (LOSS) 208,383 (69,882) 975,624 1,859,330
DEFICIT, beginning
of period (16,456,043) (18,954,212) (17,223,284) (20,883,424)
DEFICIT, end of
period $ (16,247,660)$(19,024,094)$(16,247,660)$(19,024,094)
NET INCOME (LOSS)
PER SHARE
Basic $0.02 $(0.01) $0.08 $0.30
Diluted $0.01 $(0.01) $0.06 $0.20
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 13,877,212 6,632,620 12,964,698 6,249,688
Diluted 16,706,462 6,632,620 16,005,368 9,523,329
SOURCE NGAS Resources, Inc.
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Related links:
http://www.ngas.com
CONTACT:
Media, Teresa Barnes, +1-859-263-3948, or
cell, +1-303-521-4080, or ngas@ngas.com , or Investor Relations,
Michael P. Windisch, +1-859-263-3948, or fax, +1-859-263-4228, or
ngas@ngas.com , both of NGAS Resources, Inc.
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