HOUSTON, June 15, 2005 (PRIMEZONE) -- Capco Energy, Inc. (OTCBB:CGYN) today announced results of operations for the quarter ended March 31, 2005.
The Company had gross sales and a loss from operations, from its oil and gas production activities, of $1.1 million and $353,000, respectively, for the first quarter of 2005. For the comparable period of 2004, the Company reported gross sales of $1.4 million and income from operations of $216,000. Other expense, consisting of interest expense, totaled $93,000 in 2005, resulting in a net loss for the first quarter of $446,000. In 2004, other expense, consisting of interest expense and losses on sales of marketable securities, totaled $128,000, resulting in net income for the quarter in the amount of $88,000.
The decline in gross sales is due principally to a loss of revenue in the amount of $0.8 million attributable to oil and gas properties that were sold by the Company in the fourth quarter of 2004. This reduction in revenue was partially offset by an increase in revenue of $0.3 million, resulting from volume and price increases, from the Brazos Field located in offshore Matagorda County, Texas.
Non-cash deductions for depletion and amortization increased from $167,000 in 2004 to $412,000 in 2005, due to changes in proved oil and gas reserves reported at the beginning of the respective periods.
Commenting on the reported results of operations, Ilyas Chaudhary, CEO of Capco, said, "The loss of revenue due to the sale of properties at the end of last year did not have a significant effect on our available cash flow as most of the cash flow from the properties was being used for debt service. By selling the properties we removed debt from our balance sheet and realized cash proceeds which were used for working capital. One of the challenges before us now is to increase production from our current inventory of properties. We believe that this can be accomplished without having to incur additional significant capital expenditures. If we are successful in doing this we will be able to decrease non-cash charges on a per unit of production basis that we incurred in the first quarter, which will improve our reported operating results in future periods."
Statements of Operations Summary
Three Month Periods Ended March 31, 2005 and 2004
(Dollars in thousands, except per share data)
Three Months Ended
March 31,
2005 2004
------ ------
Sales $1,088 $1,364
Gross profit 349 662
(Loss) income from operations (353) 216
Other income (expense) (93) (128)
Net (loss) income (446) 88
Earnings (loss) per share-basic:
Net (loss) income $ 0.00 $(0.00)
Weighted average common share and
common share equivalents - basic 99,769,935 94,855,729
Balance Sheet Summary
March 31, 2005
(Dollars in thousands)
Current assets $ 8,847
Oil and gas property, full cost pool method 14,412
Assets attributable to businesses sold
under contract 4,063
Other assets 1,360
Total assets $ 28,682
Current liabilities $ 11,516
Long-term debt and liabilities 4,486
Liabilities attributable to businesses sold
under contract 4,346
Deferred tax liability 27
Total stockholders' equity 8,307
Total liabilities and stockholders' equity $ 28,682
Safe Harbor Statement under the Private Securities Litigation Reform Act: The information herein contains forward-looking statements based on assumptions that may prove not to have been accurate. The business activities of Capco, as usual to its industry, are subject to many risks both calculable and incalculable. Included in these risks are oil and gas prices, the need to develop replacement reserves, the reliability of reserves estimates, the feasibility of extracting reserves, environmental risks, drilling and operating risks, and the ability of the Company to implement its business strategy. These and other risks are identified in our SEC filings and should be considered in evaluating the forward-looking statements made herein. These risks could cause actual financial results to vary from those anticipated.