"In 2006, CIOC achieved a number of exciting accomplishments and set in motion a growth strategy to deliver strong results for our shareholders in the years ahead," said James E. Knight, CIOC President and CEO. "During 2006, CIOC's revenues increased 12% above 2005 levels. The increase was due largely to higher demand for the company's seismic services, including expanded surveys and reservoir modeling, to the petroleum industry in Kazakhstan. To meet growing demand from new participants from Russia, China and Europe into Kazakhstan, we have strengthened our seismic service capabilities with additional leading-edge seismic equipment. Among other milestones in 2006 were our corporate restructuring to become a U.S. publicly-held company, the addition of experienced senior management, and a focus on achieving greater efficiencies in our operating expenses."
2006 Full-Year Analysis
For the full-year 2006, CIOC reported net income of $1.99 million, or $0.03 per basic and diluted share, on revenues of $21.43 million. These results compare with net income of $2.91 million, or $0.05 per basic and diluted share, on revenues of $19.16 million for 2005. Despite the 12% increase in revenues, net income for 2006 was lower due primarily to higher depreciation expense associated with recent seismic equipment purchases and higher general and administrative expenses, including the cost of being a publicly-held company along with costs related to the reverse merger.
During 2006, cash flow from the company's operations totaled $2.44 million, driven by higher revenues. CIOC used its cash flow to acquire additional seismic equipment and reduce debt.
Knight added, "We're off to a strong start for CIOC in 2007. We continue to experience strong demand for our seismic services. Our Dank team currently is working on three major projects, including two in Kazakhstan's Atyrau region and one in Uzbekistan. Together, these contracts are valued at approximately $5.66 million. We are focused on continuously enhancing our technological capabilities, training programs and strategic alliances to offer clients the highest levels of service and expertise."
Headquartered in Houston, CIOC acquired its current operations in August 2006 with the merger of several Kazakhstan companies, principally Dank and Kor-Tazh. Dank and PGD Services (a subsidiary of Dank) provide oil field services, including 2-D and 3-D seismic acquisitions, data processing and interpretation, reservoir modeling and topography to the petroleum industry in Kazakhstan, while Kor-Tazh operates an oil field in Western Kazakhstan.
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