Production for the year ended December 31, 2007 totaled 1.0 million BOE, of which approximately 80% was attributable to oil. Production volumes increased approximately 31% over 2006. The Company's Illinois Basin operations contributed 76% to 2007 production, while the Company's Appalachian Basin operations contributed 13% and the Company's southwestern region 11% to 2007 production.
Revenues in 2007 were $57.8 million, representing a 46% increase from 2006 revenues of $39.6 million.
The company's average realized oil price in 2007, before the effect of derivatives, was $68.16 per barrel ("Bbl"), up 12% from $60.92 per Bbl in 2006. The company's average realized natural gas price in 2007, before the effects of derivatives, was $6.88 per thousand cubic feet ("Mcf") of natural gas, down from $7.04 per Mcf of natural gas in 2006.
Total operating expenses in 2007 were $55.6 million, up from $32.7 million in 2006. Production and Lease operating expenses were $24.5 million in 2007, up from $15.2 million in 2006. General and administrative expenses were $8.6 million in 2007, up from $6.2 in 2006.
Exploration expenses were $2.9 million in 2007, which were the result of the expense of three Indiana New Albany Shale wells drilled during 2006 and an exploratory oil well in the company's southwestern region drilled in the first quarter of 2007. DD&A expenses, including impairment charges of $642,000, were $19.0 million in 2007, up from $10.7 million in 2006. The increase in DD&A expenses were primarily caused by the increase in the company's assets associated with acquisitions and its initial public offering.
The company reported a loss before minority interests and provision for taxes of $29.4 million in 2007 compared with net income before minority interest and provision for taxes of $5.9 million in 2006. All of the minority interests were acquired as part of the company's initial public offering and reorganization which closed on July 30, 2007.
Net income comparable to analyst estimates, a non-GAAP financial measure of net income which excludes deferred tax benefits, dry hole and impairment expenses, gains or losses on the sale of assets, unrealized gains or losses from financial derivatives and non-cash compensation expenses, was $486,000, or $0.02 per fully diluted share, in 2007, down from net income of $813,000 in 2006.
EBITDAX, a non-GAAP financial measure, was $25.3 million in 2007, up from $18.1 million in 2006. This represented an increase of 39% over 2006.
Capital expenditures for drilling and development in 2007 were $32.7 million, which funded the drilling or recompletion of 108 gross wells (90 net wells) and related improvements to infrastructure and facilities. Of the wells drilled or recompleted, 67 gross wells (56 net wells) are producing, 30 gross wells (29 net wells) are expected to be productive, but are awaiting completion, and 11 gross wells (5 net wells) are continuing to be evaluated to determine if the wells will be economical to produce. Additionally, the company expended $7.7 million on leasing and acquisitions during 2007.
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