KNOXVILLE, Tenn., Aug. 15, 2011 /PRNewswire/ -- Tengasco, Inc. (NYSE Amex: TGC) announced today its financial results for the quarter ended June 30, 2011. The Company realized net income attributable to common shareholders of $1.0 million or $0.02 per share of common stock during the second quarter of 2011, compared to a net income in the second quarter of 2010 to common shareholders of $0.7 million or $0.01 per share of common stock. In the second quarter of 2011, the Company had income from operations of $1.7 million compared to income from operations of $0.6 million in the second quarter of 2010.
The Company recognized $4.8 million in revenues during the second quarter of 2011 compared to $3.3 million in the second quarter of 2010. The increase in 2011 revenues was primarily due to a 6 MBbl increase in sales volumes as well as a $24.68 per barrel increase in Kansas oil prices. Kansas oil prices in the second quarter of 2011 averaged $95.46 per barrel compared to $70.78 per barrel in the second quarter of 2010.
The Company recognized $8.4 million in revenues during the first six months of 2011 compared to $6.1 million in the first six months of 2010. The increase in revenues was due to an increase in oil prices in 2011 and an 11 MBbl increase in sales volumes. Kansas oil prices in the first six months of 2011 averaged $91.57 per barrel compared to $71.01 per barrel in the first six months of 2010. The Company realized net income attributable to common shareholders of $1.3 million or $0.02 per share of common stock during the first six months of 2011 compared to a net income in the first six months of 2010 of $1.0 million or $0.02 per share of common stock. During the first six months of 2011, the Company had income from operations of $2.8 million compared to income from operations of $1.0 million during the first six months of 2010.
Jeffrey R. Bailey, the Company's Chief Executive Officer, said "We are pleased with the financial results of the second quarter and first six months of 2011. We have nearly tripled our net income from operations above both second quarter 2010 and first six months 2010 levels. We also increased our net sales in Kansas for the first six months of 2011 to 88 MBbl of oil, which is 11 MBbl above net sales during the first six months of 2010. This 11 MBbl increase was due primarily to increased sales volumes on the Albers, Hutton, Veverka C, and various other leases. We continue to drill, primarily in Kansas, having drilled 10 wells in the first half of 2011 and 3 more so far in the third quarter. Two of the third quarter wells are producers on new seismic features: the Hammeke No. 3 (just put on the pump and producing 35 BOPD) and the DeYoung No. 7 (completing now following excellent test results.) The third well, the Foster, is a dry hole and has been plugged. The Company plans to drill eleven more new wells before the end of the year. Two wells drilled early in the year, the Veverka D No. 2 and the Veverka C No. 3 have been part of our "drill- produce-polymer- produce more" campaign in our Webster area. Both of these wells have been very successful. The Veverka No. 2 started natural production with lots of water. In fact, the first two months it produced only water, gradually increasing to 2 BOPD and 350 BWPD. So it produced only 120 total barrels of oil during several months of the pre-polymer cleanup phase. We polymered this well on June 15th and in the next two weeks the well produced 544 total barrels of oil. The month of June ended with this well producing about 46 BOPD and only 34 BWPD. It produced 1078 barrels of oil for the month of July. The Veverka C No. 3 has a similar story. It was drilled in April and produced a consistent 5 BOPD with varying amounts of water. In total, about 20,000 barrels of water and 600 barrels of oil were produced in the pre-polymer phase. We just finished the polymer and returned the well to production last week. In the first four days, the well has produced a total of 285 barrels of oil and very little water. Also in the second quarter, we performed a total of six polymer treatments in addition to the two polymers done in the first quarter. Most of our drilling activity in the first quarter targeted the Webster area in Kansas, and we have more wells nearby to polymer and more locations to drill."Mr. Bailey continued: "During the second quarter and early third quarter, several third party Kansas oil companies and producing properties came up for sale at auction. We were unsuccessful in our efforts to acquire all three. We have seen a tremendous increase in the price for blocks of Kansas production with a cumulative size of 50 BOPD or bigger. The purchase price range for these properties was between $110,000 per daily barrel of production all the way up to $150,000 per daily barrel. This range of pricing is about three times the price we paid for our Riffe field production when we bought it in 2008. We have also seen renewed interest in Kansas by bigger oil and gas companies, including a new horizontal drilling play south of our core area which has become highly sought by companies like Sandridge, Chesapeake, and others. To the west we have seen an uptick in the shale plays of western Kansas and Eastern Colorado. All of this nearby new activity by larger players is having an effect on all Kansas producers, tending to raise costs in the marketplace for buying both production and leases. We will continue to seek any good fit for acquisition of producing properties at reasonable pricing and other terms." The Company will hold a telephone conference call on Monday, August 15, 2011 at 4:15 PM to 5:15 PM Eastern Daylight Time to discuss the Company's results for the quarter ended June 30, 2011 as follows: AUDIO: Shareholders and other interested parties may call Toll-Free (US & Canada): (888) 669-0687 and International Dial-In (Toll): (201) 604-0475 to participate in the conference call. Participants in the call will be required to register in order to participate in the conference call. In addition, the audio presentation may also be heard by going to http://www.visualwebcaster.com/event.asp?id=79810. Participants will be required to register at the above address to listen the presentation. Registration may be completed at any time prior to the beginning of the call. VIDEO: A slideshow corresponding with the subjects of the conference call presentation will be accessible on Tengasco's website in PDF and PowerPoint formats at the time of the call.
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