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Revenue for the three months ended
March 31, 2013 increased 58.9% to
$57,016 revenues in the same period a year earlier. These revenues are from oil production from the Company's
Texas leases and fulfilled drilling contracts from the Company's
Texas-based drilling subsidiary, Treaty Energy Drilling, LLC.
Despite revenue increases, the net loss for the first quarter of 2013 was
$3,897,839 or nil per diluted share, an increase from the net loss of
$799,689, or nil per diluted share, for the first quarter of 2012. Increased losses were attributed to increased well operations and increased consulting costs on asset evaluations. Furthermore, depreciation on existing assets resulted in total assets decreasing to
$1.596 million at
March 31, 2013 from
$2.037 million a year earlier.
During the first quarter of 2013, the Company underwent a dramatic internal restructuring and asset evaluation. All existing assets during this time were re-evaluated and work overs were performed on existing oil and gas leases to determine their potential production. The results of lease evaluations resulted in the Company's oil and gas leases producing revenues in the first three months of 2013 equal to approximately 81% of the previous reported 2012 year's total revenues. Increases in revenue during this time provide proof that the internal changes have been positive to the Company.
Following this change, additional paid in capital rose to
$21.8 million, an increase of 125% at
March 31, 2013 from
$9.7 million a year earlier. The Company considers the
$12.1 million of increased paid in capital over the last 12 months to be a major investment in the Company's future growth in the oil and gas industry. Further, the Company notes that the increase in paid in capital provides evidence of a strong investor support base despite a declining secondary market price per share. Investment in the Company provides proof that managerial changes and key changes in operating strategy are being well received amongst those interested in the long term success of the Company.
Andrew V. Reid, Chairman and CEO of Treaty Energy Corporation, stated, "We at Treaty Energy are deeply disappointed that the filing of this 10-Q has been so delayed. We have experienced a significant number of transactions during the period and the delay could not be avoided. We anticipate the 10-Qs for Q2 and soon, Q3 to be filed in short order."
Mr. Reid further commented on the status of the Company stating, "Our first quarter results provide evidence that the Company is moving in a positive direction. Revenues increased over the same period a year prior, and during the first three months of 2013 are almost equal to the total revenue of 2012. The Company has made several changes in 2013, all of which are incredibly positive. The Company drilled two new wells, Mitchell #3 and #4, both of which have produced close to 4,000 barrels of oil. We are close to drilling two additional offset wells and performing work overs on two more."