CAPCO Energy Announces Second Quarter 2004 Results


HOUSTON, Aug. 23, 2004 (PRIMEZONE) -- CAPCO Energy, Inc. (OTCBB:CGYN), today announced increased revenues and profits from continuing operations for the second quarter ended June 30, 2004.

The Company had gross sales and income from continuing operations, consisting principally of oil and gas production activities, of $1.2 million and $154,000, respectively, for the second quarter of 2004. For the comparable period of 2003, the Company reported gross sales of $846,000 and income from continuing operations of $58,000.

For the six month period ended June 30, 2004, the Company reported gross sales of $2.6 million versus $1.5 million for the same period of 2003. Income from continuing operations increased from $5,000 for the six months ended June 30, 2003, to $242,000 for the six months ended June 30, 2004.

Property acquisitions in Montana and the Texas Gulf Coast that closed in the fourth quarter of 2003 were primarily responsible for the increases in revenue and profitability. Revenues from the acquired properties totaled $518,000 and $1.2 million for the three and six month periods ended June 30, 2004, respectively.

Operations from the Company's petroleum products distribution activities, reported as discontinued operations, resulted in losses of $(442,000) and $(959,000) for the three and six month periods ended June 30, 2003, respectively. The Company divested of the discontinued business interests effective September 30, 2003.

Ilyas Chaudhary, CEO of CAPCO, said, "The reported operating results from our oil and gas production activities mark the fifth consecutive quarter of reporting operating income. Our acquisitions in Montana and the Texas Gulf Coast continue to make significant contributions to the increases in revenue, profitability and cash flow."


 Statements of Operations Summary
 Three and Six Month Periods Ended June 30, 2004 and 2003 
 (Dollars in thousands, except per share data)

                      Three Months Ended          Six Months Ended
                           June 30,                    June 30,

                      2004         2003          2004          2003
                     ------       ------        ------        ------
 Sales         $      1,193 $        846  $      2,557 $      1,535
 Gross profit           614          491         1,276          770
 Income from 
  continuing
  operations            154           58           242            5

 Loss from 
  discontinued
  operations             --         (442)           --         (959)

 Net income 
  (loss)                154         (384)          242         (954)
 Earnings 
  (loss) per
  share-basic:
   Continuing 
    operations $       0.00 $       0.00  $       0.00 $       0.00
   Net income 
    (loss)     $       0.00 $      (0.01) $       0.00 $      (0.01)

 Weighted 
  average
  common share 
  and common 
  share
  equivalents- 
  basic          95,082,059   77,090,536    94,968,894   77,102,824


 Balance Sheet Summary
 June 30, 2004
 (Dollars in thousands)

 Current assets                         $   988
 Oil and gas property, full cost
  pool method                            10,564
 Assets attributable to
  businesses sold under contract          4,013
 Other assets                             1,638

 Total assets                           $17,203


 Current liabilities                    $ 2,799
 Long-term debt and liabilities           5,381
 Liabilities attributable to
  businesses sold under contract          4,346
 Deferred tax liability                     501

 Total stockholders' equity               4,176
 Total liabilities and
  stockholders' equity                  $17,203

For further information please contact Brenda@capcoenergy.com or visit CAPCO's website at www.capcoenergy.com.

Safe Harbor Statement under the Private Securities Litigation reform Act: Statements in this release looking forward in time involve risks and uncertainties discussed here and in the company's filings with the Securities and Exchange Commission, including uncertainty regarding future revenue and integration. This 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.



            

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