LEXINGTON, Ky., Nov. 12 /PRNewswire-FirstCall/ -- Daugherty Resources,
Inc. (Nasdaq: NGAS) today reported net income of $450,045 for the three months
ended September 30, 2003, amounting to $0.05 per share on 9,557,613 weighted
average shares outstanding for the quarter. Total revenues for the current
quarter were $4,885,141, up 345% from $1,097,529 for the same quarter last
year.
The improvement in financial performance was primarily from growth in
contract drilling revenue to $3,866,000 during the third quarter of 2003.
During the quarter, the company drilled 14 natural gas wells (3.5904 net
wells), all of which have been completed as producers or successfully tested
in at least one primary pay zone as of the date of this release. The
company's oil and gas production revenue for the third quarter this year also
expanded 134% to $749,340, reflecting increased production volumes and
substantially higher prices for natural gas.
For the first nine months of 2003, net income was $2,462,975, or $0.33 per
basic share, compared to $265,797 or $0.05 per share in the first nine months
of 2002. Total revenues for the current nine-month period were
$17.567 million, an increase of 217% from $5.534 million in the same period
last year.
"Our financial performance continued to benefit from the success of our
significant ongoing drilling activity, related production growth and the
strong outlook on natural gas prices," said William S. Daugherty, President
and CEO. "These factors in turn contributed to our ability to raise capital
for further development, both for our own account and for our sponsored
drilling programs. This allowed us to maintain a more consistent pace of
drilling throughout the year. With our significant acreage position in the
Appalachian Basin, we expect continued strength in our drilling activities,
related production revenue and overall performance."
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 unaudited financial information for the
three months and nine months ended September 30, 2003 is included below.
Additional information, including the company's report on Form 10-QSB for the
third quarter of 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(U.S. funds)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
REVENUE
Contract drilling $3,866,000 $556,733 $14,924,000 $4,040,733
Oil and gas
production 749,340 320,453 1,815,630 777,899
Gas transmission
and compression 269,801 220,343 827,835 715,606
Total revenue 4,885,141 1,097,529 17,567,465 5,534,238
DIRECT EXPENSES
Contract drilling 2,026,249 240,145 6,704,598 2,016,779
Oil and gas
production 227,853 225,562 648,797 572,211
Gas transmission and
compression 144,436 72,128 399,198 417,021
Total direct
expenses 2,398,538 537,835 7,752,593 3,006,011
GROSS PROFIT 2,486,603 559,694 9,814,872 2,528,227
OTHER INCOME (EXPENSES)
Selling, general and
administrative (1,437,407) (691,872) (5,635,136) (1,698,987)
Compensation from
options and warrants -- -- (589,200) --
Depreciation, depletion
and amortization (225,560) (139,380) (598,720) (418,140)
Interest expense (153,677) (60,651) (358,310) (182,418)
Interest income 48,001 10,144 105,536 34,442
Other, net 6,850 2,673 (1,302) 2,673
Total other income
(expenses) (1,761,793) (879,086) (7,077,132) (2,262,430)
INCOME (LOSS) BEFORE
INCOME TAXES 724,810 (319,392) 2,737,740 265,797
INCOME TAX EXPENSE
Current 274,765 (121,369) 1,039,679 101,003
Benefit realized on
loss carried forward -- 121,369 (764,914) (101,003)
NET INCOME (LOSS) $ 450,045 $ (319,392) $2,462,975 $ 265,797
DEFICIT, beginning
of period $(18,106,859) $(20,169,550) $(20,119,789) $(20,754,739)
DEFICIT, end of
period $(17,656,814) $(20,488,942) $(17,656,814) $(20,488,942)
NET INCOME (LOSS) PER SHARE
Basic $ 0.05 $ (0.06) $ 0.33 $ 0.05
Diluted $ 0.04 $ (0.06) $ 0.24 $ 0.04
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 9,557,613 5,460,724 7,364,447 5,294,499
Diluted 13,130,760 5,460,724 10,867,193 5,925,338
DAUGHERTY RESOURCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. funds)
(Unaudited)
September 30, December 31,
ASSETS 2003 2002
Current assets:
Cash and cash equivalents $ 14,162,407 $ 7,031,307
Accounts receivable 542,251 328,035
Prepaid expenses and other current assets 668,130 460,663
Loans to related parties 117,301 64,162
Total current assets 15,490,089 7,884,167
Bonds and deposits 41,000 41,000
Oil and gas properties 12,850,415 9,679,549
Property and equipment 1,490,871 918,855
Loans to related parties 576,614 711,658
Investment 119,081 119,081
Deferred financing costs 593,526 43,546
Goodwill 313,177 313,177
Total assets $ 31,474,773 $ 19,711,033
LIABILITIES
Current liabilities:
Bank loans $ 134,162 $ 134,162
Accounts payable 1,064,276 1,094,941
Accrued liabilities 1,167,101 1,212,094
Income taxes payable 274,765 --
Customers' drilling deposits 4,824,300 6,764,200
Long term debt, current portion 409,669 192,341
Total current liabilities 7,874,273 9,397,738
Long term debt 7,474,097 4,027,198
Total liabilities 15,348,370 13,424,936
SHAREHOLDERS' EQUITY
Capital Stock
Authorized:
5,000,000 Preferred shares, non-cumulative,
convertible
100,000,000 Common shares
Issued: 0 Preferred shares (2002 - 558,476) -- 1,784,493
9,932,102 Common shares
(2002 - 5,505,670) 33,528,535 24,589,797
21,100 Common shares held in treasury,
at cost (23,630) (23,630)
Paid in capital 223,086 --
To be issued:
24,887 Common shares 55,226 55,226
33,783,217 26,405,886
Accumulated deficit (17,656,814) (20,119,789)
Total shareholders' equity 16,126,403 6,286,097
Total liabilities and shareholders'
equity $ 31,474,773 $ 19,711,033
SOURCE Daugherty Resources, Inc.
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Related links:
http://www.ngas.com
CONTACT:
William S. Daugherty, President of Daugherty
Resources, Inc., +1-859-263-3948, or fax, +1-859-263-4228, or
e-mail, ngas@ngas.com
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