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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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