Admiral Bay has reported record production for the first quarter ended October 31, 2008. Average daily production (before royalty) was 3,185 MCFGPD, a 60% increase over 1st quarter of 2008 and 10% increase over the 4th quarter of 2008. Revenues (before royalties) were $1.5 million, an increase of 49% from the prior period driven by a 60% increase in production, offset by lower commodity prices.
Production costs were $2.50/mcf, a decrease of 78% when compared to Q1 2008 and G&A expense was $1.58/mcf, a decrease of 36% from Q1 2008. Earnings for the quarter were a loss of ($ 0.5 million) versus ($ 3.6 million) in the prior period due to increased revenues and lower expenses and to improvements in the non-cash change in the mark-to-market of the Company's natural gas hedges as well as lower amortization costs.
President and CEO Steven Tedesco commented, "The record production results highlight the progress we are making in all of our project areas while decreasing production costs and G&A expense per unit. Production increased in all of our Kansas project areas and continues with record production for November and December as new wells are put online in the Mound Valley and Devon project areas. Additionally, the full impact of the new electric compressors has yet to be achieved at the Shiloh project. At the Revloc Project in Pennsylvania the three wells have achieved flow rates of as high as 28 MCFGPD which would be considered to be economic. The Company considers this to be significant considering these wells are dewatering a large area by themselves. The wells are currently shut-in while right of way for a 12 mile sales pipeline is finalized."
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