New Concept Energy, Inc. (NYSE MKT:GBR), (the “Company” or “NCE”) a Dallas-based oil and gas company, today reported a net loss for the six months ended June 30, 2012 of $1.3 million or $(0.65) per share, compared to net income of $97,000 or $0.05 per share for the six months ended June 30, 2011.
During the past few years the exploration, development and production of natural gas has resulted in an oversupply of natural gas which has resulted in a substantial reduction in the market price. Management of the Company believes that this oversupply will last for some time and does not anticipate an increase in the price we can receive in the market place. In April 2012 the Company entered into an agreement to fix the price it receives for the sale of its gas. For the five years ended April 2017 the Company will receive $4.53 per MCF. While the lock-in price is higher than the current market price for natural gas when applying the new price using the formula mandated by the accounting rules the result was a reduction of $912,000 in value of the Company’s recorded interests in its oil and gas properties. This reduction in value has been reflected in financial statements of the company as of June 30, 2012.
For the six months ended June 30, 2012, the Company recorded oil and gas revenues of $615,000 as compared to $560,000 for the comparable period of 2011. The changes in oil & gas revenue was due to an increase of approximately $130,000 due to new oil wells that were drilled in late 2011 and a decrease of approximately $75,000 due to lower prices being received for the sale of our natural gas.
The Company recorded revenues of $1,337,000 for the six months ended June 30, 2012 from its retirement property compared to $1,462,000 for the comparable period in 2011. The decrease was due almost entirely to a reduction in the number of residents in the facility.
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