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Company Strategy |
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A growth-oriented, independent natural gas and oil company engaged in the acquisition, exploration and development of both conventional and unconventional natural gas and oil properties in Texas, Oklahoma, Louisiana and the Appalachian region. |
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Product/Services Portfolio |
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As of June 30, 2006, most of the Company’s current production was from its approximate 64,510 gross acres (37,385 net acres) of conventional natural gas and oil properties in Texas, Oklahoma and Louisiana, which includes the Company’s acreage in the tight gas sands of the Cotton Valley trend in east Texas and the Vicksburg and Wilcox trends in south Texas. Each of these fields is characterized by established production profiles and numerous producing wells.
Typically, the exploration and development of unconventional shale gas reserves involves five stages: acquisition of a significant leasehold interest, drilling and evaluation of several initial test wells, development of area-specific well completion and fracturing techniques, connecting to a natural gas transportation system and establishment of a drilling program that exploits a substantial portion of the leased acreage.
The Company’s unconventional shale gas acreage is located in regions that have experienced significant increases in industry leasing and drilling activity in the past several years. The Company intends to acquire additional leasehold interests in unconventional shale gas regions. The Company has used, or expect to use, vertical drilling for each of its initial test wells to determine the areas in which it intends to expand its drilling program.
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Investment Analysis |
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Revenues for the six months ended June 30, 2006 increased $5.3 million, or 16%, to $37.6 million as compared to $32.3 million for the six months ended June 30, 2005.
Lease operating expenses for the six months ended June 30, 2006 increased $0.9 million, or 17%, to $6.4 million as compared to $5.5 million for the six months ended June 30, 2005.
Exploration expenses for the six months ended June 30, 2006 increased $0.4 million, or 84%, to $0.8 million as compared to $0.4 million for the six months ended June 30, 2005.
Depreciation, depletion and amortization, or DD&A, for the six months ended June 30, 2006 decreased $0.2 million, or 2%, to $10.4 million as compared to $10.6 million for the six months ended June 30, 2005.
Interest expense increased $2.0 million, or 21%, to $11.3 million during the six months ended June 30, 2006 from $9.3 million for the six months ended June 30, 2005.
Net loss was $6.0 million for the six months ended June 30, 2006 compared to a net loss of $16.9 million for the six months ended June 30, 2005.
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Income Data |
| Year |
Revenues |
Costs |
Oper Income |
Taxes |
Net Income |
EPS |
| 2003
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46957 |
57581 |
-10624 |
0.00 |
-15392 |
0.00 |
| 2004
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50709 |
82757 |
-32048 |
0.00 |
-36331 |
0.00 |
| 2005
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73576 |
82698 |
-9122 |
0.00 |
-27848 |
0.00 |
| 2006
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37615 |
32113 |
5502 |
0.00 |
-5971 |
0.00 |
| *As of period June, 30, 2006
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Balance Sheet Data
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Year |
Cash |
Acct Recv. |
Inventory |
Total Cur Assets |
Total Cur Liability |
PPE |
Total Assets |
LT Debt |
SH Equity |
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2004 |
516 |
0.00 |
847 |
10211 |
15755 |
0.00 |
169267 |
0.00 |
0.00 |
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2005 |
1080 |
0.00 |
776 |
12241 |
27038 |
0.00 |
187221 |
0.00 |
0.00 |
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2006 |
1296 |
0.00 |
1273 |
13617 |
32537 |
0.00 |
215059 |
0.00 |
0.00 |
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*As of period June, 30, 2006
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| Cash
Flow Summary
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Year |
Net Cash-Ops |
Net Cash-Inv |
Net Cash-Fin |
Net Change |
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2003 |
16935 |
-39121 |
26236 |
4050 |
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2004 |
17369 |
-22584 |
1650 |
-3565 |
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2005 |
31475 |
-35019 |
4108 |
564 |
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2006 |
18281 |
-36490 |
18425 |
216 |
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*As of period June, 30, 2006
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- Avoid 
- Short-Term Growth
- Long-Term Growth 
- Long-Term Value 