DALLAS, Nov. 15 /PRNewswire-FirstCall/ -- National Energy Group, Inc.
(OTC Bulletin Board: NEGI) today announced results for the third quarter ended
September 30, 2005.
Results of Operations
The Company manages the exploration, development, production and
operations of natural gas and oil properties, primarily located in Texas,
Oklahoma, Arkansas and Louisiana (both onshore and in the Gulf of Mexico).
The Company's principal assets are its unconsolidated non-controlling 50%
membership interest in NEG Holding LLC and management agreements with certain
affiliated companies discussed below. The Company no longer directly owns any
oil and gas properties and only recognizes income from accretion of the
preferred investment in NEG Holding LLC and fees attributable to the
management and operation of National Onshore LP, National Offshore LP and NEG
Holding LLC's oil and gas properties.
For the Three Months Ended September 30, 2005
Total revenue for the quarter ended September 30, 2005 was $15.2 million,
including revenue from accretion of the preferred investment in NEG Holding
LLC and management fees of $11.6 million and $3.7 million, respectively, which
represented a $3.6 million (31%) increase over the comparable period in 2004.
The Company recognized net income of $5.2 million for the three months
ended September 30, 2005, compared with net income of $3.7 million for the
comparable 2004 period.
For the Nine Months Ended September 30, 2005
Total revenue for the nine months ended September 30, 2005 was
$42.2 million, including revenue from accretion of the preferred investment in
NEG Holding LLC and management fees of $32.0 million and $10.2 million,
respectively, which represented a $9.0 million (27%) increase over the
comparable period in 2004.
The Company recognized net income of $14.4 million for the nine months
ended September 30, 2005 compared with net income of $9.8 million for the
comparable 2004 period.
Oil and Gas Operations
The Company's unconsolidated, non-controlled affiliate, NEG Holding LLC,
conducts its oil and gas operations through its subsidiary, 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
operations of National Onshore LP and National Offshore LP, formerly,
TransTexas Gas Corporation and Panaco, Inc., respectively. The Company does
not have any ownership interest in either of these entities. Further
information concerning the Company's relationship to NEG Holding LLC, NEG
Operating LLC, National Onshore LP and National Offshore LP is contained in
the Company's periodic reports filed with the Securities and Exchange
Commission.
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 Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Results of Operations Data:
Revenues:
Accretion of Investment
in NEG Holding LLC $11,557 $8,932 $32,001 $25,056
Management fee from
affiliates 3,667 2,641 10,187 8,120
Interest income and
other, net 24 15 52 28
Total revenue 15,248 11,588 42,240 33,204
Costs and expenses:
Salaries and wages 2,447 1,582 6,392 4,799
Insurance 204 243 585 719
Rent and utilities 205 174 603 520
Other general and
administrative expenses 846 460 2,083 1,601
Interest expense 3,485 3,485 10,455 10,455
Total costs and
expenses 7,187 5,944 20,118 18,094
Income before income taxes 8,061 5,644 22,122 15,110
Income tax expense (2,821) (1,975) (7,743) (5,289)
Net income to common
shareholders $5,240 $3,669 $14,379 $9,821
Cash Flow Data:
Cash flow from
operations (A) $(4,006) $(3,797) $(11,408) $(11,622)
Per share data:
Net income per common
share, basic and diluted $.47 $.33 $1.28 $.88
Cash flow from
operations (A) $(.36) $(.34) $(1.02) $(1.04)
Shares used in per
share computations :
Earnings per share,
basic and diluted 11,191 11,191 11,191 11,191
Cash flow per share,
basic and diluted 11,191 11,191 11,191 11,191
National Energy Group, Inc.
Condensed Balance Sheet
(In thousands)
Sept. 30, Dec. 31,
2005 2004
Assets
Cash, cash equivalents and marketable
Securities $4,482 $2,488
Other current assets 1,467 2,582
Investment in NEG Holding LLC 111,812 87,800
Deferred tax asset 11,499 19,242
Total assets $129,260 $112,112
Liabilities and Stockholders' Equity (Deficit):
Current liabilities $7,168 $2,871
Senior notes due to affiliate 148,637 148,637
Deferred gain on senior note redemption 2,208 3,737
Stockholders' deficit (28,753) (43,133)
Total liabilities and stockholders'
equity (deficit) $129,260 $112,112
(A) Cash flow from operations is shown before changes in working capital
accounts.
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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