GREENWOOD VILLAGE, Colo.,
Aug. 12, 2016 /PRNewswire/
-- Tengasco, Inc. (NYSE MKT: TGC) announced today its
financial results for the quarter ended June
30, 2016. The Company reported a net loss of $1.6 million or $0.27 per share of common stock during the second
quarter of 2016 compared to a net loss of $76,000 or $0.01
per share of common stock during the second quarter of 2015.
The $1.55 million increase in net
loss was primarily due to a non-cash ceiling test impairment of
$1.4 million recorded in the second
quarter of 2016 as a result of the low oil prices experienced
during 2015 and 2016, and a $617,000
decrease in revenues, partially offset by a $390,000 decrease in DD&A, a $133,000 decrease in general and administrative
cost, and a $50,000 decrease in
production cost and taxes. Net loss before effect of impairment was
$182,000 for the quarter ended
June 30, 2016 (a non-GAAP financial
measure – see GAAP to Non-GAAP Reconciliation at the end of this
press release).
The Company recognized $1.3
million in revenues during the second quarter of 2016
compared to $1.9 million during the
second quarter of 2015. The revenue decrease from 2015 levels was
primarily due to a $313,000 decrease
related to a $11.33 per barrel
decrease in the average oil price from an average price of
$51.19 per barrel during second
quarter of 2015 compared to an average price of $39.86 per barrel during the second quarter of
2016, and a $326,000 decrease related
to a 6.4 MBbl decrease in sales volumes, primarily from the Albers,
Croffoot, DeYoung, Howard A, Liebenau, McElhaney A, Rogers, Stahl,
JR Thyfault, Veverka B and C leases. In addition, there was a
$24,000 increase in methane facility
revenues related to higher runtimes and increased efficiency.
The Company reported a net loss of $3.0
million or $0.50 per share of
common stock during the first six months of 2016 compared to a net
loss of $591,000 or $0.10 per share of common stock during the first
six months of 2015. The $2.44
million decrease in net income was primarily due to
recording a non-cash ceiling test impairment of $2.1 million together with a $1.3 million decrease in revenues, partially
offset by a $413,000 decrease in
production cost and taxes, a $186,000
decrease in general and administrative cost, and a $786,000 decrease in DD&A. Net loss before
effect of impairment was $945,000 for
the six months ended June 30, 2016 (a
non-GAAP financial measure – see GAAP to Non-GAAP Reconciliation at
the end of this press release).
The Company recognized $2.2
million in revenues during the first six months of 2016
compared to $3.5 million during the
first six months of 2015. The revenue decrease from 2015 levels was
due to a $716,000 decrease related to
a $12.90 per barrel decrease in the
average oil price from an average price of $46.64 per barrel during first six months of 2015
compared to an average price of $33.75 per barrel during the first six months of
2016, and a $658,000 decrease related
to a 14.1 MBbl decrease in oil sales
volumes.
Michael J. Rugen, CEO, said,
"During the second quarter of 2016, the Company initiated the
interpretation of the seismic shoot over our Saline County, Kansas acreage. Any drilling of
locations that may result from this interpretation will be
contingent on improvement of commodity prices. In addition,
the Company continues to evaluate acquisition, joint venture, and
corporate opportunities that will add value to the
Company. Although we continue 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 potential drilling as well as other
possible transactions, the Company is considering additional means
of raising capital during this period of low commodity prices and
the resulting difficulty faced by most oil and gas companies in
obtaining additional borrowed funds in the current financial
markets.
During the second quarter 2016 we continued to see realized oil
prices remain at low historical levels per barrel. Current
price levels still make it a challenge for the Company to regain
profitability. During the first and second quarters of 2016,
the Company recorded non-cash ceiling test impairments due to
continuing low oil prices. This is the fourth quarter in a row
that an impairment has been recorded. The Company also expects
to record an impairment during the third quarter of 2016 as it
appears that prices during the third quarter of 2016 will be lower
than prices realized during the third quarter of 2015. We will
continue 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.
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GAAP to Non-GAAP
Reconciliation ($ millions)
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Quarter
Ended
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Six Months
Ended
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June 30,
2016
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June 30,
2016
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Net loss from
continuing operations (US GAAP)
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$
(1.6)
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$
(3.0)
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Impairment
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$
1.4
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$
2.1
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Net loss before
effect of impairment
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$
(0.2)
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$
(0.9)
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SOURCE Tengasco, Inc.