GREENWOOD VILLAGE, Colo.,
May 13, 2016 /PRNewswire/
-- Tengasco, Inc. (NYSE MKT: TGC) announced today its
financial results for the quarter ended March 31, 2016. The Company reported a net loss
of $(1,404,000) or $(0.23) per share of common stock during the
first quarter of 2016 compared to net loss of $(515,000) or $(0.08) per share of common stock during the
first quarter of 2015. The $889,000 decrease was primarily due to recording
a $702,000 decrease in revenues, a
non-cash ceiling test impairment of $641,000 as a result of the low oil prices
experienced during 2015 and 2016, a $331,000 decrease in income tax benefit, all of
which were partially offset by a $396,000 decrease in DD&A, a $363,000 decrease in production costs and taxes,
and a $54,000 decrease in general and
administrative costs. Net loss before effect of impairment
was $(763,000) or $(0.13) for the quarter ended March 31, 2016 (a non-GAAP financial measure –
see GAAP to Non-GAAP Reconciliation at the end of this press
release).
The Company also recognized $932,000 in revenues during the first quarter of
2016 compared to $1,634,000 during
the first quarter of 2015. This revenue decrease from 2015 levels
was primarily due to a $407,000
decrease related to a $14.63 per
barrel decrease in the average oil price from an average price of
$42.30 per barrel during first
quarter of 2015 compared to an average price of $27.67 per barrel during the first quarter of
2016, and a $328,000 decrease related
to a 7.7 MBbl decrease in oil sales volumes. The more
significant sales volume declines were experienced in the Albers B,
Coddington, Dick A, Heyl, Howard A, Kraus B, Liebenau, Mosher,
Veverka B and D leases.
Michael J. Rugen, CEO said,
"During the first quarter of 2016, the Company completed the
seismic shoot over its Saline County,
Kansas acreage. While we have not completed our
interpretation of the seismic, it appears that several potential
drilling locations may exist. In addition, the Company
continues to evaluate acquisition, joint venture, and corporate
opportunities that will add value to the Company. Although we
are in the process of evaluating several opportunities, no
agreements have been entered into by the Company to move forward
with any of the opportunities currently under evaluation. In
order to fund this potential drilling as well as other possible
transactions, the Company is considering additional means of
raising capital as the current credit facility would not be
sufficient to fund these potential opportunities.
Personnel reductions announced during the first quarter of 2016,
resulted in savings of payroll and benefit costs of approximately
$19,000. However, these savings
were offset by one time severance payments made to the severed
personnel. The Company realized only a small portion of these
saving as the reductions occurred late in the first quarter.
In future quarters, the Company anticipates savings of
approximately $125,000 per quarter as
a result of these personnel reductions. These anticipated
savings may be reduced as a result of using contractors and
consultants on an as needed basis.
During the first quarter 2016 we saw realized oil prices drop
below $30 per barrel. This was
the lowest level we have seen during this current period of low
prices. Although we have experienced price increases since
the end of the first quarter, current price levels still make it a
challenge for the company to regain profitability. During the
first quarter of 2016, the Company recorded a non-cash ceiling test
impairment. This represents the third quarter in a row that
such an impairment has been recorded. The Company also
expects to record an impairment during the second quarter of 2016
as it appears that prices during the second quarter of 2016 will be
significantly lower than prices realized during the second quarter
of 2015. We will continue to evaluate all of our suppliers
and service providers in order to determine if there are additional
ways for the Company to reduce G&A and operating costs."
Forward-looking statements made in this release are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Investors are cautioned that all
forward-looking statements involve risk and uncertainties which may
cause actual results to differ from anticipated results, including
risks associated with the timing and development of the Company's
reserves and projects as well as risks of downturns in economic
conditions generally, and other risks detailed from time to time in
the Company's filings with the Securities and Exchange
Commission.
GAAP to Non-GAAP
Reconciliation ($ thousands, except per share data)
|
|
Quarter
Ended
|
March 31,
2016
|
|
|
Net loss from
continuing operations (US GAAP)
|
$ (1,404)
|
Impairment
|
$ 641
|
Net loss before
effect of impairment
|
$ (763)
|
|
|
Net loss per share –
basic and diluted (US
GAAP)
|
$ (0.23)
|
Impairment, net of
tax per share – basic and diluted
|
$ 0.10
|
Net loss per share
before effect of impairment – basic and diluted
|
$ (0.13)
|
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SOURCE Tengasco, Inc.