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

Cross appeals were filed and on February 14, 2012 the Court of Appeals issued an opinion which, among other things, reinstated the jury award of damages jointly and severely against the defendants including Eurenergy in the amount of $66.5 million and affirmed the award of exemplary against Eurenergy of $8.5 million. The Court of Appeals also overturned the Trial Court’s ruling favorable to the Company rendering a judgment for that amount plus exemplary damages against the Company as the “alter ego” of Eurenergy.

The Company plans to file a Petition for Review of the Court of Appeals Decision with the Supreme Court of the State of Texas. The Company vigorously denies that it is the “alter ego” of any other entity. There are questions regarding the underlying liability of Eurenergy and if Eurenergy is successful in its petition for review or, even if unsuccessful if the Company is successful on its positions described above, the Trial Court’s judgment could be reinstated and the Company would have no liability on this claim.

     

NEW CONCEPT ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
 

December 31,

2011 2010
Assets
 
Current assets
Cash and cash equivalents $ 109 $ 59
Accounts receivable from oil and gas sales 167 223
Other current assets   20   101
Total current assets   296   383
 
Note and interest receivable – related party - 10,361
 
Oil and natural gas properties (full cost accounting method)
Proved developed and undeveloped oil and gas properties, net of depletion 11,141 11,789
 
Property and equipment, net of depreciation
Land, buildings and equipment - oil and gas operations

1,486

1,308
Other  

150

  156
Total property and equipment 1,636 1,464
 
Other assets   377   70
 
Total assets $ 13,450 $ 24,067
     
NEW CONCEPT ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - CONTINUED
(amounts in thousands, except share amounts)
 

December 31,

2011 2010
Liabilities and stockholders' equity
 
Current liabilities
Accounts payable - trade $ 422 $ 83

Accrued expenses

  417     156  
Total current liabilities 839 239
 
Long-term debt
Notes payable 2,249 1,308
Payable - related parties 691 953
Asset retirement obligation 2,702 2,573
Other long-term liabilities   491     723  
Total liabilities 6,972 5,796
 
Stockholders' equity
Preferred stock, Series B 1 1
Common stock, $.01 par value; authorized, 100,000,000
shares; issued and outstanding, 1,946,935 shares
at December 31, 2010 and 2009 20 20
Additional paid-in capital 58,838 58,838
Accumulated deficit   (52,381 )   (40,588 )
 
  6,478     18,271  
 
Total liabilities & equity $ 13,450   $ 24,067  
         
NEW CONCEPT ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATION
(amounts in thousands, except per share data)
 
Year Ended December 31,
2011 2010 2009
Revenue
Oil and gas operations, net of royalties $ 1,020 $

1,288

$

1,246

Real estate operations   2,881    

2,925

   

2,852

 
  3,901     4,213     4,098  
 
 
Operating expenses
Oil and gas operations 1,430 1,292 1,498
Real estate operations 1,290 1,225 1,217
Lease expense

866

886 958
Corporate general and administrative

619

731 1,342
Accretion of asset retirement obligation 129 123 117

Impairment of natural gas and oil properties

  1,428     -     1,695  
  5,762     4,257     6,827  
Operating earnings (loss) (1,861 ) (44 ) (2,729 )
 
Other income (expense)
Interest income 360 497 574
Interest expense (131 ) (124 ) (123 )
Bad debt expense - note receivable (10,006 ) - -
Other income (expense), net   (155 )   (340 )   68  
(9,932 ) 33 519
 
Earnings from continuing operations (11,793 ) (11 ) (2,210 )
 
Net income (loss) applicable to common shares $ (11,793 ) $ (11 ) $ (2,210 )
 
Net income (loss) per common share-basic and diluted $ (6.06 ) $ (0.01 ) $ (1.14 )
 
Weighted average common and equivalent shares outstanding - basic 1,947 1,947 1,947




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