LEXINGTON, Ky., Nov. 10 /PRNewswire-FirstCall/ -- NGAS Resources, Inc.
(Nasdaq: NGAS) today reported third quarter production revenues of $1,452,338,
up 94% from the third quarter last year. Production volumes increased 63% to
224,615 Mcf equivalents. Total revenues increased 71% to $8,358,071 in the
third quarter of 2004 from $4,885,141 in the same quarter last year. The
Company realized net income for the quarter of $17,068 compared to $450,045
for the same period last year.
Highlights for the quarter and nine months ended September 30, 2004
include:
-- 25 gross (6.9940 net) natural gas wells successfully drilled in Q3
-- Contract drilling revenues increased to $6,561,100, up 70% from Q3 in
2003
-- Average price for third quarter natural gas production was $6.54 per
Mcf
-- 42 miles of gathering lines constructed in the first nine months of
2004
-- Pre-tax income of $1,825,744 realized in first nine months of 2004,
with EPS of $0.07
-- Net oil and gas properties increased $19.2 million to $35.6 million,
up 117%
"We continued our record pace of successful drilling in the first nine
months this year, with a total of 103 natural gas wells," said William S.
Daugherty, President and CEO of NGAS. "Our profitability was impacted by
wells drilled under prior turnkey commitments that did not account for greater
average well depths and higher steel casing costs. Going forward, our
drilling margins will reflect turnkey adjustments for these factors, starting
with our year-end 2004 drilling program, which raised $20.8 million from
outside investors. We plan to drill 90 new wells in that program over the
next two quarters. Future production should grow considerably from our 30.7%
stake in program wells, the addition of new gathering lines and the
integration of recently acquired properties."
NGAS extended its gathering systems in the first nine months of 2004 by an
additional 42 miles, including a gathering line connecting its Straight Creek
wells to a major regional pipeline. The Company's 100% ownership of its
gathering systems, now extending over 155 miles in its core operating areas,
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 11:00 a.m. (EST) today to discuss third
quarter 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=963374 ,
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, the Company
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 third 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
(U.S. funds)
September 30, December 31,
2004 2003
ASSETS (Unaudited)
Current assets:
Cash $10,638,758 $22,594,993
Subscriptions receivable -- 2,335,009
Accounts receivable 1,613,629 503,177
Prepaid expenses and other current assets 1,012,922 773,415
Loans to related parties 185,974 140,780
Total current assets 13,451,283 26,347,374
Bonds and deposits 124,400 99,000
Oil and gas properties 35,589,214 16,369,859
Property and equipment 2,022,422 2,054,088
Loans to related parties 349,598 517,940
Investments 55,454 119,081
Deferred financing costs 94,761 247,923
Goodwill 313,177 313,177
Total assets $52,000,309 $46,068,442
LIABILITIES
Current liabilities:
Accounts payable $2,324,531 $1,445,603
Accrued liabilities 2,405,217 2,865,045
Income taxes payable 3,107 144,450
Customers' drilling deposits 5,071,100 10,162,600
Long term debt, current portion 376,995 397,722
Total current liabilities 10,180,950 15,015,420
Future income taxes 674,542 257,647
Long term debt 3,025,848 4,739,387
Deferred compensation 214,595 --
Total liabilities 14,095,935 20,012,454
SHAREHOLDERS' EQUITY
Capital stock
Authorized:
5,000,000 Preferred shares,
non-cumulative,
convertible
100,000,000 Common shares
Issued:
15,009,940 Common shares (December 31,
2003 - 10,676,030) 52,578,020 36,244,623
21,100 Common shares held in
treasury, at cost (23,630) (23,630)
Paid-in capital - options
and warrants 1,332,926 1,140,321
To be issued:
62,850 Common shares (December 31,
2003 - 1,403,335) 247,650 5,917,958
54,134,966 43,279,272
Deficit (16,230,592) (17,223,284)
Total shareholders' equity 37,904,374 26,055,988
Total liabilities and
shareholders' equity $52,000,309 $46,068,442
NGAS RESOURCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(U.S. funds)
(Unaudited)
Three Months Ended Nine months Ended
September 30, September 30,
2004 2003 2004 2003
REVENUE
Contract drilling $6,561,100 $3,866,000 $27,927,475 $14,924,000
Oil and gas
production 1,452,338 749,340 3,230,351 1,815,630
Gas transmission
and compression 344,633 269,801 1,093,296 827,835
Total revenue 8,358,071 4,885,141 32,251,122 17,567,465
DIRECT EXPENSES
Contract drilling 5,157,915 2,026,249 20,499,504 6,704,598
Oil and gas
production 517,113 227,853 1,187,200 648,797
Gas transmission
and compression 172,532 144,436 686,724 399,198
Total direct
expenses 5,847,560 2,398,538 22,373,428 7,752,593
GROSS PROFIT 2,510,511 2,486,603 9,877,694 9,814,872
OTHER INCOME (EXPENSES)
Selling, general
and
administrative (1,901,190) (1,437,407) (6,831,254) (5,635,136)
Compensation cost (194,404) -- (427,450) (742,800)
Depreciation,
depletion and
amortization (324,946) (225,560) (833,550) (598,720)
Interest expense (87,550) (153,677) (284,253) (358,310)
Interest income 80,076 48,001 248,282 105,536
Other, net (35,954) 6,850 76,275 (1,302)
Total other
income
(expenses) (2,463,968) (1,761,793) (8,051,950) (7,230,732)
INCOME BEFORE
INCOME TAXES 46,543 724,810 1,825,744 2,584,140
INCOME TAX EXPENSE
Current 9,351 96,168 416,157 861,082
Future 20,124 178,597 416,895 178,597
Benefit realized
on loss carried
forward -- -- -- (764,914)
29,475 274,765 833,052 274,765
NET INCOME 17,068 450,045 992,692 2,309,375
DEFICIT, beginning
of period (16,247,660) (19,024,094) (17,223,284) (20,883,424)
DEFICIT, end
of period $(16,230,592) $(18,574,049) $(16,230,592) $(18,574,049)
NET INCOME PER SHARE
Basic $0.00 $0.05 $0.07 $0.31
Diluted $0.00 $0.04 $0.07 $0.22
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 14,725,187 9,557,613 13,555,811 7,364,447
Diluted 15,877,802 13,130,760 16,107,154 10,867,193
SOURCE NGAS Resources, Inc.
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Related links:
http://www.ngas.com
http://phx.corporate-ir.net/playerlink.zhtml?c=97946&s=wm&e=963374
CONTACT:
Media Contact, Teresa Barnes,
+1-859-263-3948, or cell, +1-303-521-4080, or Investor Relations
Contact, Michael P. Windisch, CFO, +1-859-263-3948, or fax,
+1-859-263-4228, both of NGAS Resources, Inc., ngas@ngas.com
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