Tengasco Announces Year-End 2009 Financials And Results Of Operations
KNOXVILLE, Tenn., March 31 /PRNewswire-FirstCall/ -- Tengasco, Inc. (NYSE Amex: TGC) announced today that it has filed with the Securities and Exchange Commission its Annual Report on Form 10-K for the year ended December 31, 2009.
The Company reported a net loss to holders of common stock of $2.0 million or $0.03 per share in 2009 compared to a net income of $0.2 million or $0.00 per share in 2008 and compared to a net income of $3.5 million or $0.06 per share in 2007. The net loss in 2009 reported by the Company included a noncash unrealized loss on derivatives of $1.3 million or $0.02 per share. This noncash unrealized loss was based on the December 31, 2009 fair value of the oil derivative agreement entered into in July 2009. There have been no cash settlement payments under the derivative agreement made or received by the Company as of year end 2009 or through March 31, 2010.
The Company realized revenues of $9.7 million in 2009 compared to $15.6 million in 2008 and $9.4 million in 2007. Revenues decreased $5.9 million from 2008 primarily due to a decrease in oil prices in Kansas as prices averaged $54.48 in 2009 compared to $92.69 in 2008. The average price received for Kansas oil sales in 2007 was $66.42.
Gas prices received for sales of gas from the Swan Creek Field averaged $3.99 per Mcf in 2009, $9.10 per Mcf in 2008 and $6.86 per Mcf in 2007. Oil prices received for sales of oil from the Swan Creek field averaged $54.87 per barrel in 2009, $80.20 per barrel in 2008 and $64.81 in 2007.Jeffrey R. Bailey, Chief Executive Officer, said "During 2009 the Company began a comeback from the results of the low oil prices seen in late 2008 and early 2009. Drilling and workovers in 2009 were limited by our lower cash flow resulting from lower commodity prices. Those lower prices also resulted in downward adjustments to our reserves as reported at year end 2008 and caused us to have a ceiling test write down that we reported this time last year. In contrast, we had no write down in 2009 and in fact at year end 2009, the present value of our proved oil and gas reserves has rebounded to $28 million on 2.3 million barrels of oil equivalent (MMBOE) from the value of $10.3 million on 1.4 MMBOE at year end 2008. This occurred due primarily to higher oil prices later during the year, well above the $30's seen in January and February 2009. In addition, effective in 2009, the SEC made changes to modernize reserve calculations by using a yearly average price rather than a single day's price on the last day of the reporting year. This modernization rule will allow a more effective evaluation of energy company reserves." Mr. Bailey also said: "During very late 2009 and so far in 2010 the Company has been returning to a more active capital investment program as cash flow has improved. We drilled one well in late 2009 that was a salt water disposal well, and in 2009 also performed two polymer treatments which added about 2900 barrels to our 2009 production total. In early 2010 we have successfully drilled two oil wells, the Veverka C #2 and the Veverka B #3. The production has been averaging about 6 BOPD for the C #2, and the B #3 well just started producing at the time of this writing. Both wells are in the area where we have had successful polymers efforts to enhance production, and will now be included on the list of future polymer candidates. We intend to continue actively drilling during the rest of the year, and plan to drill up to 10 wells and do polymer treatments on 15 to 20 wells if prices hold up which will allow us to fund these activities from cash flow."
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