KNOXVILLE, Tenn., Aug. 15, 2011 /PRNewswire/ -- Tengasco, Inc.
(NYSE Amex: TGC) announced today its financial results for the
quarter ended June 30, 2011. The
Company realized net income attributable to common shareholders of
$1.0 million or $0.02 per share of common stock during the second
quarter of 2011, compared to a net income in the second quarter of
2010 to common shareholders of $0.7
million or $0.01 per share of
common stock. In the second quarter of 2011, the Company had income
from operations of $1.7 million
compared to income from operations of $0.6
million in the second quarter of 2010.
The Company recognized $4.8
million in revenues during the second quarter of 2011
compared to $3.3 million in the
second quarter of 2010. The increase in 2011 revenues was primarily
due to a 6 MBbl increase in sales volumes as well as a $24.68 per barrel increase in Kansas oil prices. Kansas oil prices in the second quarter of
2011 averaged $95.46 per barrel
compared to $70.78 per barrel in the
second quarter of 2010.
The Company recognized $8.4
million in revenues during the first six months of 2011
compared to $6.1 million in the first
six months of 2010. The increase in revenues was due to an
increase in oil prices in 2011 and an 11 MBbl increase in sales
volumes. Kansas oil prices in the first six months of 2011
averaged $91.57 per barrel compared
to $71.01 per barrel in the first six
months of 2010. The Company realized net income attributable
to common shareholders of $1.3
million or $0.02 per share of
common stock during the first six months of 2011 compared to a net
income in the first six months of 2010 of $1.0 million or $0.02 per share of common stock. During the
first six months of 2011, the Company had income from operations of
$2.8 million compared to income from
operations of $1.0 million during the
first six months of 2010.
Jeffrey R. Bailey, the Company's
Chief Executive Officer, said "We are pleased with the financial
results of the second quarter and first six months of 2011.
We have nearly tripled our net income from operations above
both second quarter 2010 and first six months 2010 levels. We also
increased our net sales in Kansas
for the first six months of 2011 to 88 MBbl of oil, which is 11
MBbl above net sales during the first six months of 2010.
This 11 MBbl increase was due primarily to increased sales
volumes on the Albers, Hutton, Veverka C, and various other leases.
We continue to drill, primarily in Kansas, having drilled 10 wells in the first
half of 2011 and 3 more so far in the third quarter. Two of the
third quarter wells are producers on new seismic features: the
Hammeke No. 3 (just put on the pump and producing 35 BOPD) and the
DeYoung No. 7 (completing now following excellent test results.)
The third well, the Foster, is a dry hole and has been plugged. The
Company plans to drill eleven more new wells before the end of the
year. Two wells drilled early in the year, the Veverka D No. 2 and
the Veverka C No. 3 have been part of our "drill- produce-polymer-
produce more" campaign in our Webster area. Both of these wells
have been very successful. The Veverka No. 2 started natural
production with lots of water. In fact, the first two months
it produced only water, gradually increasing to 2 BOPD and 350
BWPD. So it produced only 120 total barrels of oil during
several months of the pre-polymer cleanup phase. We polymered this
well on June 15th and in the next two
weeks the well produced 544 total barrels of oil. The month of June
ended with this well producing about 46 BOPD and only 34 BWPD. It
produced 1078 barrels of oil for the month of July. The Veverka C
No. 3 has a similar story. It was drilled in April and
produced a consistent 5 BOPD with varying amounts of water. In
total, about 20,000 barrels of water and 600 barrels of oil were
produced in the pre-polymer phase. We just finished the polymer and
returned the well to production last week. In the first four days,
the well has produced a total of 285 barrels of oil and very little
water. Also in the second quarter, we performed a total of six
polymer treatments in addition to the two polymers done in the
first quarter. Most of our drilling activity in the first
quarter targeted the Webster area in Kansas, and we have more wells nearby to
polymer and more locations to drill."
Mr. Bailey continued: "During the second quarter and early third
quarter, several third party Kansas oil companies and producing properties
came up for sale at auction. We were unsuccessful in our efforts to
acquire all three. We have seen a tremendous increase in the price
for blocks of Kansas production
with a cumulative size of 50 BOPD or bigger. The purchase
price range for these properties was between $110,000 per daily barrel of production all the
way up to $150,000 per daily barrel.
This range of pricing is about three times the price we paid for
our Riffe field production when we bought it in 2008. We have
also seen renewed interest in Kansas by bigger oil and gas companies,
including a new horizontal drilling play south of our core area
which has become highly sought by companies like Sandridge,
Chesapeake, and others. To the west we have seen an uptick in the
shale plays of western Kansas and
Eastern Colorado. All of
this nearby new activity by larger players is having an effect on
all Kansas producers, tending to
raise costs in the marketplace for buying both production and
leases. We will continue to seek any good fit for acquisition
of producing properties at reasonable pricing and other terms."
The Company will hold a telephone conference call on
Monday, August 15, 2011 at
4:15 PM to 5:15 PM Eastern Daylight
Time to discuss the Company's results for the quarter ended
June 30, 2011 as follows:
AUDIO: Shareholders and other interested parties may call
Toll-Free (US & Canada): (888)
669-0687 and International Dial-In (Toll): (201) 604-0475 to
participate in the conference call. Participants in the call will
be required to register in order to participate in the conference
call. In addition, the audio presentation may also be heard
by going to
http://www.visualwebcaster.com/event.asp?id=79810.
Participants will be required to register at the above
address to listen the presentation. Registration may be completed
at any time prior to the beginning of the call.
VIDEO: A slideshow corresponding with the subjects of the
conference call presentation will be accessible on Tengasco's
website in PDF and PowerPoint formats at the time of the call.
A transcript of the conference call will be prepared 24 hours
following the conference and will be available on the Company's
website, which can be accessed at http://www.tengasco.com.
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.
SOURCE Tengasco, Inc.