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New Concept Energy, Inc. Reports Fourth Quarter And Full Year 2011 Results

New Concept Energy, Inc. (AMEX:GBR), (the “Company” or “NCE”) a Dallas-based oil and gas company, today reported a net loss for the twelve months ended December 31, 2011 of $11.8 million or $(6.06) per share, compared to net loss of $11,000 or $(0.01) per share for the twelve months ended December 31, 2010. Net loss for the three months ended December 31, 2011 was $11.9 million as compared to a net income of $125,000 for the three months ended December 31, 2010.

The most significant components of the loss recorded in 2011 were bad debt expense of $10 million and impairment expense of $1.4 million for the Company’s oil and gas properties.

Between 2006 and the early part of 2009 the Company loaned a related real estate management company its surplus cash for interest rates ranging from 2% over the prime rate to 8% interest. At December 31, 2009 these loans totaled $11 million. Since 2009 the Company has been paid $857,000 in interest and a principal pay down of $1 million; however, in the fourth quarter of 2011 the Company determined that the financial condition of the obligator had deteriorated and there could be no assurance that the amount owed would or could be collected. The company has recorded a reserve of $10 million and written the receivable to zero.

Due to the decline of the prices for natural gas during 2011 the Company has taken a non-cash charge to operations of $1.4 million as an impairment of the Company’s oil and gas reserves.

In December 2006, Carlton Energy Group, LLC (“Carlton”) instituted litigation against an individual, Eurenergy Resources Corporation (“Eurenergy”) and several other entities including New Concept Energy, Inc., alleging tortuous conduct, breach of contract and other matters and as to the Company that it was the “alter ego” of Eurenergy. The Carlton claims were based upon an alleged tortuous interference with a contract related to the right to explore a coal bed methane concession in Bulgaria which had never (and has not to this day) produced a drop of hydrocarbons. At no time during the pendency of this project or since did the Company or any of its officers or directors have any interest whatsoever in the success or failure of the so-called “Bulgaria Project.” However, in the litigation, Carlton alleged that the Company was the “alter ego” of certain of the other Defendants including Eurenergy. Following a jury trial in 2009, the Trial Court granted a judgment for the Company that it was not the “alter ego” of any of the other parties and thereby would not incur any damages.

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