Capco Energy Announces First Quarter 2005 Results
Capco Energy, Inc. (OTC BB: CGYN.OB) announced results of operations for the quarter ended March 31, 2005.
The Company had gross sales and a loss from operations, from its oil and gas production activities, of $1.1 million and $353,000, respectively, for the first quarter of 2005. For the comparable period of 2004, the Company reported gross sales of $1.4 million and income from operations of $216,000. Other expense, consisting of interest expense, totaled $93,000 in 2005, resulting in a net loss for the first quarter of $446,000. In 2004, other expense, consisting of interest expense and losses on sales of marketable securities, totaled $128,000, resulting in net income for the quarter in the amount of $88,000.
The decline in gross sales is due principally to a loss of revenue in the amount of $0.8 million attributable to oil and gas properties that were sold by the Company in the fourth quarter of 2004. This reduction in revenue was partially offset by an increase in revenue of $0.3 million, resulting from volume and price increases, from the Brazos Field located in offshore Matagorda County, Texas.
Non-cash deductions for depletion and amortization increased from $167,000 in 2004 to $412,000 in 2005, due to changes in proved oil and gas reserves reported at the beginning of the respective periods.
Commenting on the reported results of operations, Ilyas
Chaudhary, CEO of Capco, said, "The loss of revenue due
to the sale of properties at the end of last year did not
have a significant effect on our available cash flow as
most of the cash flow from the properties was being used
for debt service. By selling the properties we removed debt
from our balance sheet and realized cash proceeds which
were used for working capital. One of the challenges before
us now is to increase production from our current inventory
of properties. We believe that this can be accomplished
without having to incur additional significant capital expenditures.
If we are successful in doing this we will be able to decrease
non-cash charges on a per unit of production basis that
we incurred in the first quarter, which will improve our
reported operating results in future periods."