KNOXVILLE, Tenn., March 29, 2012 /PRNewswire/ -- Tengasco, Inc. (NYSE Amex: TGC) announced today that it has filed with the Securities and Exchange Commission its Annual Report on Form 10-K for the year ended December 31, 2011. The Company reported a net income to holders of common stock of $4.7 million or $0.08 per share in 2011, compared to a net loss to holders of common stock of $(1.7) million or $(0.03) per share in 2010. Net income in 2011 includes the effect of an adjustment for reduced deferred income tax expense in the amount of $1.7 million or $0.03 per share, resulting from the removal of a valuation allowance related to the deferred tax asset balance. This reduction in deferred income tax expense was based on the expectation that the Company will be able to fully utilize its previously incurred net operating losses to reduce tax liability on future net taxable income. Had this valuation allowance not been removed, the Company would have recorded net income of $2.9 million or $0.05 per share. The Company realized revenues of $17.1 million in 2011 compared to $13.2 million in 2010. Revenues increased $3.9 million from 2010 primarily due to an increase in oil prices and production gains from polymers and drilling in Kansas as prices averaged $88.15 in 2011 compared to $72.14 in 2010. The Company reported total proven reserves at December 31, 2011 of 2.6 million barrels, valued at $69.8 million on a discounted future net cash flow basis before effect of income taxes, up from 2.5 million barrels valued at $48.3 million at the end of 2010. This resulted in the Company's ratio of reserve replacement in 2011 being 137% of the oil and gas the Company actually produced in 2011. This makes 2011 the most active year for drilling in the Company's history with 26 wells drilled. The Company also set a gross production record of 246,000 barrels of oil for the year as announced earlier. The Company reported that during 2011, the Company recorded a $(0.4) million loss on derivatives. The loss was composed of a $0.45 million unrealized gain, offset by ($0.86) million of settlement payments made to Macquarie under the collar hedge agreement that expired in July 2011. During 2010, the Company had recorded a $0.5 million gain on derivatives, composed of a $0.6 million unrealized gain partially offset by ($0.1) million of settlement payments made to Macquarie. Jeffrey R. Bailey, CEO, said "We are pleased with the highly successful year of 2011 as revealed in our earnings and financial results. We have reported earnings of $0.08 per share of common stock in 2011, compared to a loss of ($0.03) per share in 2010. This is a clear indication of the success of the Company's exploration and production efforts in 2011. As previously announced, our production in 2011 was at record annual levels, and this contributed significantly to earnings, along with the effects of continuing high oil prices experienced for most of 2011. We are very proud that though 2011 production levels were high, the Company has for the second straight year added more proved reserves than the amount of oil and gas it actually produced, which is a requirement for future success of any exploration and production company. At our MMC plant, we have commenced electricity production at the plant site in January 2012 which has had the expected doubly beneficial result of increasing both uptime in operations at the methane plant as well as increased revenues. We are also pleased to announce that our senior lender, in recognition of the success enjoyed by the Company in 2011, has increased the Company's borrowing base 15% from $20 million to $23 million. We anticipate continuing to fund an aggressive 36 well drilling program in 2012 from cash flow further supported by the availability of additional borrowed funds. Management intends to continue to increase the value of the Company for the benefit of almost 8,000 beneficial owners of the Company's stock, primarily through the drill bit, both by drilling and polymer treatments, although we are always looking for reasonably priced and strategically located conventional acquisition opportunities." Mr. Bailey continued: "We have also begun 2012 with a very busy first quarter, with 2 drilling rigs currently working for the Company in Kansas. We have drilled 8 wells to date, with 6 producers and 2 dry holes. The successful wells include an extension of the 2006 McElhaney lease with another well coming in at 40 BOPD. The Company began this year's polymer program by using 2 of our pre-planned locations for polymers and these two have been performed in the first quarter of 2012. One of these is the Hilgers B #6, an old well re-drill (washdown) drilled late last year that came in pre-polymer at 1 – 2 BOPD and 343 BOWPD. It was polymered this month. Since the polymer job, and its return to production for about a week this well has averaged about 80 BOPD and less than 90 BOWPD. The second polymered well was from the Veverka lease in Rooks County, has just today started back into production after the polymer treatment. We continue to focus a significant portion of our 2012 capex drilling expenditures in this area of Rooks County that will be tied to our strategy to "drill and produce then polymer and produce more." The key to success in this area is the planned incorporation of a known future polymer into the geophysical and petrophysical model even before the well is drilled. So far the polymer of both early wells and the newer wells in this area have met or exceeded our goals. We are also doing some continued exploration in Trego County with 2 wells drilled there in the first quarter, one a dry hole the other in completion phase right now." The Company also announced that the Annual Meeting of the Company's Shareholders will be held on Tuesday, May 29, 2012 at the Homewood Suites by Hilton on Turkey Creek Drive in Knoxville, Tennessee at 1:00 P.M. Record date for shareholders entitled to vote at the meeting will be April 2, 2012. The Company will hold a telephone conference call on Thursday, March 29, 2012 at 4:15 PM Eastern Time to discuss the Company's Report on Form 10-K for the year ended December 31, 2011 and Company operations in the first quarter of 2012 as follows: AUDIO: Shareholders and other interested parties may call Toll-Free (US & Canada): (888) 669-0687 and International Dial-In (Toll): (201) 604-0475 to participate in the conference call. Participants in the call will be required to register in order to participate in the conference call. In addition, the audio presentation may also be heard by going to http://www.visualwebcaster.com/event.asp?id=86121. Participants will be required to register at the above address to listen the presentation. Registration may be completed at any time prior to the beginning of the call. VIDEO: A slideshow corresponding with the subjects of the conference call presentation will be accessible on Tengasco's website in PDF and PowerPoint formats at the time of the call.