New Concept Energy, Inc. Reports Fourth Quarter and Full Year 2017 Results
DALLAS–(BUSINESS WIRE)–New Concept Energy, Inc. (NYSE American: GBR), (the “Company” or “NCE”)
a Dallas-based oil and gas company, today reported Results of Operations
for the fourth quarter ended December 31, 2017. During the three months
ended December 31, 2017 the Company reported a net loss of $2,851,000 or
($1.39) per share, compared to a net income of $641,000 or $0.32 per
share for the same period ended December 31, 2016.
For the full year ended December 31, 2017 the Company reported a net
loss of $3,246,000 or ($1.59) per share, compared to a net income of
$48,000 or $0.02 per share for the same period ended December 31, 2016.
Included in the 2017 loss are non-cash expenses of $3,047,000 including
an impairment expense of $2,626,000 to reduce the carrying value of the
Company’s oil and gas properties, depreciation, depletion and
amortization expense of $396,000 and a $25,000 expense to write off
assets from the operations at a retirement center that was discontinued
in 2017.
Revenues: Total revenues from the oil & gas operation was
$791,000 in 2017 and $764,000 in 2016. Net revenue for our oil and gas
operation increased by $27,000 in 2017 as compared to 2016. Included in
2016 revenue is a onetime fee of $30,000. The increase in revenue in
2017 was principally due to an increase in the quantity of oil and gas
produced.
Operating Expenses: Operating expenses for continuing oil & gas
operations was $1,027,000 in 2017 and $1,181,000 in 2016. This decrease
of $154,000 was principally due to a reduction of depreciation and
depletion expense of $174,000. The remaining increase was the result of
an overall reduction in operating expenses.
In 2017 pursuant to the requirements of the “full cost ceiling test” for
oil & gas companies we recorded a non-cash charge to operations of
$2,646,000 to write down its investment in Ohio and West Virginia. This
charge to earnings was caused by a revaluation of the Company’s
non-producing oil and gas reserves.
Corporate Expenses were $408,000 in 2017 and $352,000 in 2016.
The increase is due to an overall increase in operating expenses.
Interest Expense: Interest Expense was $24,000 in
2017 as compared to $38,000 in 2016. The decrease was due to a reduction
in the long term debt.
Other Income & (Expense): Other income & (expense) was
$28,000 for 2017 as compared to ($110,000) in 2016. In 2017 the most
significant item was the receipt of $64,000 for a receivable the Company
had previously written off. The expenses in 2016 were principally the
write off assets pertaining to the termination of the lease at the
retirement center.
Discontinued Operations: The Company leased and operated Pacific
Pointe Retirement Inn (“Pacific Pointe”) a retirement community in King
City, Oregon. Our lease provided that should the property be sold the
lease maintained by the Company would be terminated. The owners
completed the sale of the building on March 30, 2017 and our lease
terminated on that date. These financial statements reflect the
operations of the retirement community as a discontinued operation. Net
income (loss) from discontinued operations was ($5,000) and $4,000 in
2017 and 2016, respectively.
About New Concept Energy, Inc.
New Concept Energy, Inc. is a Dallas-based oil and gas company which
owns oil and gas wells and mineral leases in Ohio and in West Virginia.
For more information, visit the Company’s website at www.newconceptenergy.com.
| NEW CONCEPT ENERGY, INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (amounts in thousands, except per share data) | ||||||||
| Year Ended December 31, | ||||||||
| 2017 | 2016 | 2015 | ||||||
| Revenue | ||||||||
| Oil and gas operations, net of royalties | $ | 791 | $ | 764 | $ | 820 | ||
| 791 | 764 | 820 | ||||||
| Operating expenses | ||||||||
| Oil & gas operations | 1,027 | 1,181 | 1,800 | |||||
| Corporate general and administrative | 408 | 352 | 605 | |||||
| Impairment of natural gas and oil properties | 2,626 | – | 2,717 | |||||
| 4,061 | 1,533 | 5,122 | ||||||
| Operating earnings (loss) | (3,270 | ) | (769 | ) | (4,302 | ) | ||
| Other income (expense) | ||||||||
| Interest income | 25 | 23 | 12 | |||||
| Interest expense | (24 | ) | (38 | ) | (62 | ) | ||
| Gain on prepayment of debt | – | 888 | – | |||||
| Gain on sale of land | – | 50 | – | |||||
| Bad debt expense (recovery) – note receivable | – | – | 1,430 | |||||
| Other income (expense), net | 28 | (110 | ) | (32 | ) | |||
| 29 | 813 | 1,348 | ||||||
| Earnings (loss) from continuing operations | (3,241 | ) | 44 | (2,954 | ) | |||
| Earnings from discontinued operations | (5 | ) | 4 | 332 | ||||
| Net income (loss) applicable to common shares | $ | (3,246 | ) | $ | 48 | $ | (2,622 | ) |
| Net income (loss) per common share-basic and diluted | $ | (1.59 | ) | $ | 0.02 | $ | (1.35 | ) |
| Weighted average common and equivalent shares outstanding – basic | 2,037 | 1,947 | 1,947 | |||||
| NEW CONCEPT ENERGY, INC. AND SUBSIDIARIES | ||||
| CONSOLIDATED BALANCE SHEETS | ||||
| (amounts in thousands) | ||||
| December 31, | ||||
| 2017 | 2016 | |||
| Assets | ||||
| Current assets | ||||
| Cash and cash equivalents | $ | 419 | $ | 113 |
| Accounts receivable from oil and gas sales | 67 | 119 | ||
| Current portion note receivable | 36 | 206 | ||
| Total current assets | 522 | 438 | ||
| Oil and natural gas properties (full cost accounting method) | ||||
|
Proved developed and undeveloped oil and gas properties, net of depletion |
2,721 | 5,608 | ||
| Property and equipment, net of depreciation | ||||
| Land, buildings and equipment – oil and gas operations | 661 | 706 | ||
| Other | – | 25 | ||
| Total property and equipment | 661 | 731 | ||
| Note Receivable | 301 | 401 | ||
| Total assets | $ | 4,205 | $ | 7,178 |
| NEW CONCEPT ENERGY, INC. AND SUBSIDIARIES | ||||
| CONSOLIDATED BALANCE SHEETS – CONTINUED | ||||
| (amounts in thousands, except share amounts) | ||||
| December 31, | ||||
| 2017 | 2016 | |||
| Liabilities and stockholders' equity | ||||
| Current liabilities | ||||
|
Accounts payable – trade (including $412 and $160 in 2017 and 2016 due to related parties) |
$ | 446 | $ | 238 |
| Accrued expenses | 29 | 59 | ||
| Current portion of long term debt | 81 | 96 | ||
| Total current liabilities | 556 | 393 | ||
| Long-term debt | ||||
| Notes payable less current portion | 243 | 296 | ||
| Asset retirement obligation | 2,770 | 2,770 | ||
| Total liabilities | 3,569 | 3,459 | ||
| Stockholders' equity | ||||
|
Series B convertible preferred stock, $10 par value, liquidation value |
||||
| of $100 authorized 100 shares, issued and outstanding one share | 1 | 1 | ||
| Common stock, $.01 par value; authorized, 100,000,000 | ||||
| shares; issued and outstanding, 2,036,935 and 1,946,935 shares | ||||
| at December 31, 2017 and 2016 | 21 | 20 | ||
| Additional paid-in capital | 59,000 | 58,838 | ||
| Accumulated deficit | (58,386 | ) | (55,140 | ) |
| 636 | 3,719 | |||
| Total liabilities & stockholders' equity | $ | 4,205 | $ | 7,178 |
Contacts
New Concept Energy, Inc.
Gene Bertcher, 800-400-6407
[email protected]
