Tengasco Announces Second Quarter Results
Tengasco, Inc. on Friday announced its financial results for the quarter ended June 30, 2006. The Company realized a net income attributable to common shareholders of $720,769 or $0.01 per share of common stock during the second quarter of 2006, compared to a net loss in the second quarter of 2005 to common shareholders of ($132,540) or ($0.00) per share of common stock.
The Company recognized $2,354,736 in total revenues from its Kansas and Tennessee properties during the second quarter of 2006 compared to $1,612,097 in the second quarter of 2005. The Company increased production by 8,229 barrels allocable to the Company's interest in the second quarter of 2006 over 2005 levels. This increased production volume created approximately 56% of the Company's total revenue increase, with the remaining 44% of the total revenue increase being attributable to higher oil prices in 2006. Oil prices in the second quarter of 2006 averaged $64.92 per barrel as compared to $50.29 per barrel in the second quarter of 2005.
The Company recognized $4,453,705 in total revenues from its Kansas and Tennessee properties during the first six months of 2006 compared to $3,043,115 in the first six months of 2005. Approximately half of this increase in revenues was due to a 14,590 barrel increase allocable to the Company's interest in oil production from the Kansas field, with the remaining portion of the revenue increase being attributable to an increase in oil prices in 2006. The Kansas oil production increase is attributable to well workovers, polymer completion workovers, and the Company's ownership interest in the Kansas drilling program wells. Oil prices in the first six months of 2006 averaged $61.92 per barrel as compared to $49.10 per barrel in the first six months of 2005.
Jeffrey R. Bailey, Chief Executive Officer, said, "We are extremely pleased with the continuing pattern of the Company's record production levels, increasing revenues, and record profits. Our second quarter 2006 revenues were 46% higher than the second quarter 2005 revenues. In addition, our second quarter 2006 revenues were 12% higher than in the first quarter in 2006. In the second quarter 2006 we had a net cash flow of $1,154,068 which is also the highest quarterly net cash flow result in the history of the Company. More than half of this record net cash flow and Company revenues have been the result of our higher production volumes and not simply from higher prices. We produced in the second quarter 2006 a Company-record quarterly volume of 46,011 barrels of oil, 44,242 barrels of which were produced in Kansas. As a result, the Company made an all-time Company-record 31% profit in the second quarter 2006. This is the fourth consecutive quarter in which the Company has shown a profit, also a first for the Company."
Mr. Bailey continued, "In the recent past the Company has used increased production together with higher prices to completely rework the Company's balance sheets. Our successful track record since February 2004 in doing this has helped the Company to close a senior credit facility with Citibank Texas, N.A. in June 2006, and in doing so meeting a primary Company goal of establishing a commercial banking relationship. This completes the turnaround targeted by the Company in early 2004: the Company has gone from total liabilities as of December 31, 2003 of about $19.4 million to approximately $3.2 million as of June 30, 2006, which includes the loan obligation to Citibank Texas, an established energy lender that will serve the Company as it continues to grow. We look forward to building on these successes in the future, while continuing development of our existing properties, and seeking out new opportunities and acquisitions."
The Company also announced that Tengasco was added to the Russell Microcap(TM) Index when Russell Investment Group reconstituted its family of U.S. indexes on June 30, 2006. Russell indexes are used by investment managers and institutional investors for index funds and as benchmarks for both passive and active investment strategies.
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