New Concept Energy, Inc. Reports Second Quarter 2012 Results

For the six months ended June 30, 2012, the Company recorded oil and gas operating expenses of $924,000 as compared to $700,000 for the comparable period of 2011. The increase was principally due to an increase in depletion expense. The marked decrease in the market price being paid for natural gas resulted in a modification in the valuation the company placed on its gas reserves which impacted the anticipated production life of its wells. This lead to an acceleration of the depletion expense being recorded.

For the six months ended June 30, 2012, interest income was $0 as compared to $239,000 for the comparable period in 2011. In December 2011 the Company became concerned about the collectability of a certain note receivable and determined that the note and any accrued interest be fully reserved. The Company continues to accrue interest but provides a full reserve should it be unable to collect.

For the six months ended June 30, 2012, the Company recorded interest expense of $118,000 as compared to $62,000 for the comparable period in 2011. The increase is due to additional interest due on financing obtained in late 2011. The proceeds were used to drill wells.

NEW CONCEPT ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATION
(unaudited)
(amounts in thousands, except per share data)
		For the Three Months ended June 30,									For the Six Months ended June 30,
		2012				2011					2012				2011
Revenue
Oil and gas operations, net of royalties		$	325			$	280				$	615			$	560
Real estate operations			663				733					1,337				1,462
			988				1,013					1,952				2,022
Operating expenses
Oil and gas operations			453				365					924				700
Real estate operations			353				321					719				711
Lease expense			231				193					462				384
Corporate general and administrative			134				126					293				250
Accretion of asset retirement obligation			34				32					68				64
Impairment of natural gas and oil properties			-				-					912				-
			1,205				1,037					3,378				2,109
Operating earnings (loss)			(217	)			(24	)				(1,426	)			(87	)
Other income (expense)
Interest income			-				120					-				239
Interest expense			(56	)			(31	)				(118	)			(62	)
Other income (expense), net			104				1					108				73
Income/(Expense)			48				90					(10	)			250
Net income (loss) applicable to common shares		$	(169	)		$	66				$	(1,436	)		$	163
Net income (loss) per common share-basic and diluted		$	(0.09	)		$	0.03				$	(0.74	)		$	0.08
Weighted average common and equivalent shares outstanding - basic			1,947				1,947					1,947				1,947

NEW CONCEPT ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
(amounts in thousands)
		June 30,			December 31,
		2012			2011
Assets
Current assets
Cash and cash equivalents		$	100		$	109
Accounts receivable from oil and gas sales			216			167
Other current assets			5			20
Total current assets			321			296
Oil and natural gas properties (full cost accounting method)
Proved developed and undeveloped oil and gas properties, net of depletion			9,930			11,141
Property and equipment, net of depreciation
Land, buildings and equipment - oil and gas operations			1,448			1,486
Other			158			150
Total property and equipment			1,606			1,636
Other assets			578			377
Total assets			12,435		$	13,450

NEW CONCEPT ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - CONTINUED
(unaudited)
(amounts in thousands, except share amounts)
		June 30,				December 31,
		2012				2011
Liabilities and stockholders' equity
Current liabilities
Accounts payable - trade		$	284			$	422
Accrued expenses			208				417
Total current liabilities			492				839
Long-term debt
Notes payable			2,329				2,249
Payable - related parties			1,312				691
Asset retirement obligation			2,770				2,702
Other long-term liabilities			490				491
Total liabilities			7,393				6,972
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 March 31, 2012 and December 31, 2011			20				20
Additional paid-in capital			58,838				58,838
Accumulated deficit			(53,817	)			(52,381	)
			5,042				6,478
Total liabilities & equity		$	12,435			$	13,450

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