For the three-month period ended September 30, 2005, Aspen reported revenues from continuing operations of $1.15 million compared to $893 thousand recorded in the same period last year. For the period, Aspen reported a net loss from continuing operations of $897 thousand or $0.01 per share versus a net loss from continuing operations of $1.45 million or $0.02 per share in 2004. Net loss, including discontinued operations, was $16 million or $0.26 per share in 2004. The net loss in 2004 relates to the aforementioned sale of virtually all the Company's US oil and gas producing assets.
For the nine-month period ended September 30, 2005, Aspen reported revenues from continuing operations of $2.69 million compared to $2.72 million recorded in the same period last year. For the period, Aspen reported a net loss from continuing operations of $2.63 million or $0.04 per share versus a net loss from continuing operations of $3.14 million or $0.06 per share in 2004. Net loss, including discontinued operations, was $16.99 million or $0.31 per share in 2004.
Results for the three and nine-month period were positively impacted by higher average commodity prices. Offsetting these were reduced contributions from Aspen's wholly owned subsidiary, United Cementing and Acidizing, Inc., which reported a 25 percent decrease in revenue in the quarter and the nine-month period.
Average production for the three months ended September 30, 2005 averaged 288 BOE (barrel of oil equivalent, 6:1 conversion) per day compared to 329 BOE per day during the same period last year. Although production declined year over year, third quarter production increased by 14 percent from the second quarter of 2005 due to new production from wells in Butte Saskatchewan, drilled in during the winter of 2004-05, and put into production during the quarter. The production mix in the third quarter of 2005 was 58 percent gas and 42 percent oil Aspen's production totals as at September 30, 2005 do not include production from the wells recently completed in the Daly Field in Manitoba.
General and administrative (G&A) expenses increased approximately 25 percent to $1,249,143 during the three months ended September 30, 2005 and by 54 percent to $2.67 million in the nine-month period. The increase relates to several factors including a one-time charge for an out of court settlement in regards to the Duke Energy Trading and Marketing L.L.C. (Duke) lawsuit, one-time severance charges, and additional legal costs related to ongoing litigation. Excluding one-time charges and legal costs, G&A decreased by 17 percent in the quarter and by 5 percent in the nine -month period.
"The combination of our continued operational improvement and our success in Manitoba has positioned Aspen for continued improvement in the fourth quarter and significantly improved results in 2006," stated Robert Calentine, CEO of Aspen. "We are making significant progress in reducing our legal exposure, most recently with the settlement of the Duke law suit. We continue to reduce debt and corporate costs. With the new wells in Manitoba coming on line within the next 30 days, we anticipate exiting 2005 with production approaching 400 BOE per day. In early 2006, we expect to initiate an extensive drilling program to further develop our acreage in Manitoba. The program will significantly increase our production and cash flow, as well as provide a strong foundation for the future growth of Aspen."
In the third quarter, the Company drilled three horizontal wells in the Daly Field in Manitoba. Each well encountered four potential productive zones in the Lodgepole and Bakken formations. Construction and tie-in of the temporary surface gathering facilities for the two productive wells (the 16-10 and the (2) 16-10), consisting of two production tanks per well, have been completed the wells were put into production using tubing pumps at a nominal cumulative rate of approximately 80-100 barrels of oil per day (bopd) and monitored to determine optimum pump size. Aspen's engineers are currently working to properly size the pumps to handle the high water volumes that are typical in the Daly field and increase production rates to a higher stabilized output level. During the monitoring process, production from the wells is being sold at Cromer referenced pricing (September 2005 price of Cnd.$75.05/bbl).
As at September 30, 2005, Aspen had working capital of $166 thousand compared to working capital of $3.84 million at 2004 year end. The change in working capital was due to the oil and gas drilling activity in 2005. Aspen currently has long term debt of approximately $136 thousand, bank debt of $104 thousand, and proven reserves (excluding Manitoba) of $7.6 million.
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