WALLA WALLA, Wash., May 18, 2004 (PRIMEZONE) -- Cadence Resources Corporation (OTCBB:CDNR), an energy exploration and development company, today announced its financial results for the second quarter and six months ended March 31, 2004.
For the second quarter 2004, the Company posted revenues of $688,000 far ahead of the $44,000 reported second quarter 2003. This increase came from production of oil from the Company's property in Wilbarger County, Texas, and from gas production from its De Soto Parish property in Louisiana, and its property in Michigan. The first five wells at the Logansport site began producing and the sixth, seventh and eighth wells were completed in the quarter accounting for a substantial portion of the increase. In addition, the rise in energy prices has strengthened the Company's top line growth. During second quarter 2003, revenues came from the sale of oil production from the Company's oil wells in Texas only.
The operating loss for the second quarter ended March 31, 2004 shrank to $138,000 from a loss of $271,000 in the same period prior year. The net loss was $141,000 in the second quarter of 2004, or $0.02 per fully diluted share, improved from the net loss of $383,000, or $0.04 per share, in quarter ended March 31, 2003.
Howard M. Crosby, president of Cadence Resources, said, "We are very happy with the continued rise in our revenues, which were $130,000 higher than in our first quarter. As our ability to increase production through the successful completion of wells grows, so will our revenues. We are also confident that the recent increases in the price of energy will continue to benefit us. Many analysts say that OPEC itself may have trouble bringing prices down through increased production because demand is so great."
He added, "We are studying methods to enhance the production in De Soto Parish by completing or re-completing indicated pay zones in our wells that we have not yet exploited. All of our five producing wells as of December 31, 2003, were drilled to Cotton Valley formation to depths of in excess of 10,000 feet. During the quarter ended March 31, 2004, we drilled two wells to the shallower Hosston sand formation, which lies between 6,450 and 8,950 feet. In light of the rate of production from the Hosston formation wells, our most recent well has been drilled to the Cotton Valley. We are in active discussions with our joint venture partner in determining our future drilling plans in this area."
He also said, "In addition to the developments on the Logansport, Louisiana project, we completed our leasing program in the Anadarko Basin in Kansas with over 26,000 acres now under lease. We will commence a 3-D seismic program in June and are targeting oil-bearing formations to depths of about 4,200 feet."
For the half year ended March 31, 2004, Cadence reported revenues of $1.2 million well ahead of the $77,000 reported in the first half of fiscal 2003. The operating loss for the first half of fiscal 2004 grew to $515,000 from $471,000 in the same period prior year. However, the net loss of $517,000, or $0.06 per fully diluted share, in the first six months of fiscal 2004 was less than the $627,000 loss, or $0.07 per fully diluted share, in the same period of 2003.
This release contains forward-looking statements that involve substantial risks and uncertainties. Investors and prospective investors in our common stock can identify these statements by forward-looking words such as "may," "will," "expect," "intend," "anticipate," believe," "estimate," "continue" and other similar words. Statements that contain these words should be read carefully because they discuss our future expectations, make projections of our future results of operations or of our financial condition or state other "forward-looking" information.
Three Months Ended Six Months Ended
March 31, March 31,
---------------------- ----------------------
2004 2003 2004 2003
(Unaudited) (Unaudited)
---------------------- ----------------------
REVENUES $ 688,368 $ 44,449 $1,247,752 $ 77,825
---------- ---------- ---------- ----------
GENERAL AND
ADMINISTRATIVE
EXPENSES
Depreciation,
depletion and
amortization 309,173 8,496 542,284 17,131
Officers' and
directors'
compensation 35,000 173,477 90,000 218,477
Consulting 82,100 21,425 140,513 99,655
Professional fees 150,389 41,393 440,436 49,428
Oil and gas lease
expenses 114,126 39,095 223,512 59,447
Oil and gas
consulting 27,500 - 42,500 -
Oil and gas
productions costs 33,171 - 72,650 -
Exploration and
drilling 12,000 - 12,000 -
Lease operating
expenses 2,410 5,663 3,658 42,179
General and
administrative 60,223 26,222 195,203 62,425
---------- ---------- ---------- ----------
Total expenses 826,092 315,771 1,762,756 548,742
---------- ---------- ---------- ----------
OPERATING LOSS (137,724) (271,322) (515,004) (470,917)
---------- ---------- ---------- ----------
OTHER INCOME
(EXPENSES)
Interest income 213 46 4,193 126
Interest expense (8,132) (81,762) (10,313) (83,001)
Partnership loss - (159) - (8,468)
Refund of
production taxes 5,155 - 5,155 -
Gain on debt
forgiveness - - - -
Gain (loss) on
disposition and
impairment of
assets (720) (29,969) (720) (64,592)
---------- ---------- ---------- ----------
Total other income
(expense) (3,484) (111,844) (1,685) (155,935)
---------- ---------- ---------- ----------
LOSS BEFORE TAXES (141,208) (383,166) (516,689) (626,852)
INCOME TAX BENEFIT - - - -
---------- ---------- ---------- ----------
LOSS FROM CONTINUING
OPERATIONS (141,208) (383,166) (516,689) (626,852)
GAIN (LOSS) FROM
DISCONTINUED
OPERATIONS
Gain from mining
operations (net
of income taxes) - - - -
---------- ---------- ---------- ----------
NET INCOME (LOSS) (141,208) (383,166) (516,689) (626,852)
OTHER COMPREHENSIVE
INCOME (LOSS)
Unrealized gain
(loss) on market
value of
Investments (103,299) 32,655 (210,593) 41,332
---------- ---------- ---------- ----------
COMPREHENSIVE INCOME
(LOSS) $ (244,507) $ (350,511) $ (727,282) $ (585,520)
========== ========== ========== ==========
NET INCOME (LOSS)
PER COMMON SHARE
BASIC AND DILUTED
Net loss from
continuing
operations $ (0.02) $ (0.04) $ (0.06) $ (0.07)
Net income (loss)
from discontinued
operations nil nil nil nil
---------- ---------- ---------- ----------
NET INCOME (LOSS)
PER COMMON SHARE $ (0.02) $ (0.04) $ (0.06) $ (0.07)
========== ========== ========== ==========
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING,
BASIC AND DILUTED 12,645,330 9,037,193 12,630,615 8,721,129
========== ========== ========== ==========
CADENCE RESOURCES CORPORATION
BALANCE SHEETS
March 31,
2004 September 30,
-------------------------
(Unaudited) 2003 2002
----------- ----------- -----------
ASSETS
CURRENT ASSETS
Cash $ 485,543 $ 3,619,345 $ 40,011
Oil & gas revenue
receivable 385,640 84,575 26,123
Receivable from
working interest
owners 12,873 12,873 16,037
Notes receivable 3,720 3,720 13,078
Prepaid expenses 137,225 5,925 27,500
Other current assets 27,425 425 431
----------- ----------- -----------
TOTAL CURRENT ASSETS 1,052,426 3,726,863 123,180
----------- ----------- -----------
OIL AND GAS
PROPERTIES, USING
SUCCESSFUL EFFORTS
ACCOUNTING
Proved properties 638,917 590,747 48,694
Unproved properties 3,785,555 833,836 78,997
Wells and related
equipment and
facilities 474,312 202,886 67,374
Support equipment
and facilities 331,858 151,963 105,108
Prepaid mineral
leases 540,013 395,973 177,177
Less accumulated
depreciation,
depletion,
amortization and
impairment (604,885) (61,611) (4,312)
----------- ----------- -----------
TOTAL OIL AND GAS
PROPERTIES 5,165,770 2,113,794 473,038
----------- ----------- -----------
PROPERTY AND EQUIPMENT
Furniture and
equipment 4,226 1,660 1,440
Less accumulated
depreciation (1,625) (1,451) (1,440)
----------- ----------- -----------
TOTAL PROPERTY AND
EQUIPMENT 2,601 209 -
----------- ----------- -----------
OTHER ASSETS
Investments 185,092 394,454 448,793
----------- ----------- -----------
NONCURRENT ASSETS
Net assets of
discontinued
operations 246,757 246,757 246,757
----------- ----------- -----------
TOTAL ASSETS $ 6,652,646 $ 6,482,077 $ 1,291,768
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 633,774 $ 584,866 $ 119,923
Revenue distribution
payable 136,795 68,929 14,835
Payable to related
party - 550,000 2,500
Deferred working
interest - - 22,184
Interest payable 13,054 15,752 -
Accrued compensation 8,165 94,920 66,261
Notes payable -
related parties 510,000 460,000 -
Notes Payable 1,000,000 - -
----------- ----------- -----------
TOTAL CURRENT
LIABILITIES 2,301,788 1,774,467 225,703
----------- ----------- -----------
REDEEMABLE PREFERRED
STOCK 59,925 59,925 -
----------- ----------- -----------
STOCKHOLDERS' EQUITY
Common stock, $.01
par value;
100,000,000 shares
authorized,
12,673,800,
12,512,827 and
6,866,210 shares
issued and
outstanding,
Respectively 126,738 125,128 68,662
Additional paid-in
capital 18,711,738 18,343,422 13,291,965
Stock options 1,210,704 1,210,704 626,790
Stock warrants 51,375 51,375 233,334
Accumulated deficit (15,379,773) (14,863,687) (12,906,132)
Accumulated other
comprehensive
income (loss) (429,849) (219,257) (248,554)
TOTAL STOCKHOLDERS'
EQUITY 4,290,933 4,647,685 1,066,065
----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS'
EQUITY $ 6,652,646 $ 6,482,077 $ 1,291,768
=========== =========== ===========