CLEVELAND, April 4, 2007 (PRIME NEWSWIRE) -- John D. Oil and Gas Company (OTCBB:JDOG) today announced it had a net loss from operations of $1.9 million largely due to writing off the minority interest asset and recording an impairment expense to one of the self-storage facilities. The Company re-evaluated its Painesville, Ohio self-storage property and determined an impairment expense was appropriate due to property changes in that area. Significant on-going expenses included the depletion expense relating to capitalized well costs and writing off a dry well. While these expenses are normal expenses in the oil and natural gas business, they overshadowed the revenues from production in 2006 because it was the first year of production for the Company and eight of the twenty one wells drilled during the year were drilled in the last quarter. We anticipate increased revenues as we continue to build our reserves and grow our Company.
Gregory J. Osborne, the Company's COO, stated, "I am optimistic that our revenues will increase in 2007 as we continue to focus on our aggressive drilling program. Our Company partners have secured a drilling rig and service equipment to assure our drilling objectives stay on target. Our goal is to drill 30 to 35 wells this year and 40 to 50 in 2008. Our current pace of development should allow us to meet our five year target of 250 total wells drilled."
Total revenues from continuing operations and interest income increased $1,377,974, or 250.7%, to $1,927,676 for the year ended December 31, 2006, from $549,702 for the year ended December 31, 2005. The increases are largely the result of oil and natural gas production occurring for the first time in 2006.
Total operating expenses increased $1,759,170, or 103.6%, to $3,456,655 for the year ended December 31, 2006, from $1,697,485 for the year ended December 31, 2005. The increased expenses are primarily due to an impairment expense of $733,258 on the Painesville self-storage facility, $722,204 of depletion expense for the year and writing off a dry well for $280,262.
As a result of the above factors, the Company's loss from continuing operations increased $1,617,503, or 469.7%, to a loss of $1,961,838 for the year ended December 31, 2006 from a loss of $344,335 for the year ended December 31, 2005.
The Company's income from discontinued operations net of minority interest after the sale of eighteen self-storage facilities on April 5, 2005 was $2,132,696 for the year ended December 31, 2005. The Company had net income of $1,788,361 for the year ended December 31, 2005, largely due to the sale of the eighteen self-storage facilities.
About John D. Oil and Gas Company
In conjunction with the name change from Liberty Self-Stor, Inc. to John D. Oil and Gas Company on June 27, 2005, the Company approved a change to its business plan to permit it to enter into the business of extracting and producing oil and natural gas products. The Company is actively drilling oil and natural gas wells in Northeast Ohio. The Company currently also retains two self-storage facilities located in Gahanna and Painesville, Ohio. The Company has entered into an agreement for a possible sale of the Gahanna facility. The Company may, if business and time warrant, sell the Painesville facility in the future.
Forward-Looking Statements
Certain matters discussed in this press release may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors, including risks related to the Company's future business plans, that are beyond the Company's ability to control or estimate precisely. The Company cannot guarantee success under the new business plan as drilling wells for oil and gas is a high-risk enterprise and there is no guarantee the Company will become profitable. These and other risk factors are detailed from time to time in the Company's SEC reports and filings, including its annual report on Form 10-KSB, quarterly reports on Form 10-QSB and periodic reports on Form 8-K. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.