National Energy Group, Inc. Today Announces Fiscal Year 2000 Oil and Gas Reserves and Earnings Results for the Year and Fourth Quarter Ended December 31, 2000

Apr 19, 2001, 01:00 ET from National Energy Group, Inc.

    DALLAS, April 19 /PRNewswire/ -- National Energy Group, Inc.
 (OTC Bulletin Board:   NEGI) today announces fiscal year 2000 oil and gas
 reserves and earnings results for the year and fourth quarter ended
 December 31, 2000.
 
     Oil and Gas Reserves
     National Energy Group, Inc. announced today that at December 31, 2000, the
 Company's estimated total proved oil and natural gas reserves were
 64.0 billion cubic feet ("Bcf") of natural gas and 5.8 million barrels of
 crude oil or 98.7 Bcf equivalent ("Bcfe") of natural gas.  Natural gas
 accounted for 64.8% of the total proved reserves and 87.7% of the total proved
 reserves were classified as proved developed.
     Based on SEC reporting guidelines, the pretax discounted present value of
 the future net cash flows of the Company's total proved reserves was
 approximately $372.0 million, using average oil and natural gas prices at
 December 31, 2000 of $10.53 per million cubic feet ("Mcf") of natural gas and
 $25.95 per barrel of crude oil.  During 2000, the Company added proved
 reserves totaling 21.1 Bcfe and sold a total of 7.2 Bcfe.  The proved reserve
 additions of 21.1 Bcfe represent a 178.1% replacement of production for 2000.
 
     Results of Operations
     In connection with confirmation of the Joint Plan of Reorganization, the
 Company recorded an extraordinary gain on the discharge of indebtedness during
 the three months ended September 30, 2000 of approximately $11.3 million.
 This extraordinary gain was primarily composed of the reversal of interest
 accrued on the senior notes prior to the Bankruptcy Proceeding of
 approximately $10.5 million ("Prepetition Interest").  In accordance with
 Bankruptcy Court rules and regulations, the Company did not accrue interest on
 the senior notes during the Bankruptcy Proceeding ("Unaccrued Interest").  It
 was determined that reinstatement of the Prepetition Interest and the
 Unaccrued Interest is necessary and consistent with the Joint Plan of
 Reorganization.  As a result, the Company has recognized Unaccrued Interest
 (including interest on the Prepetition Interest and Unaccrued Interest) of
 $35.3 million and Prepetition Interest of $10.5 million as long-term interest
 payable at December 31, 2000.  The reinstatement of Unaccrued Interest has
 been recognized as an extraordinary loss in the year 2000 statement of
 operations.  In Note 13 to the Company's Consolidated Financial Statements
 contained in its Form 10-K for the year ended December 31, 2000, the results
 of operations for the quarter ended September 30, 2000 have been restated to
 reflect this reinstatement.  The Company and Arnos Corp. and its affiliate,
 the holders of the senior notes, have agreed this interest will not be due
 earlier than April 2003.  Accordingly, interest will accrue on the revised
 obligation amount of $210.8 million pursuant to terms of the senior notes
 indenture.
 
     For the Three Months Ended December 31, 2000
     Revenues for the three months ended December 31, 2000 were $14.1 million,
 up 22.6% from $11.5 million in 1999, due to the increase in oil and gas prices
 from 1999, offset in part by a decline in overall production.  The average
 price received by the Company for crude oil for the fourth quarter of 2000 was
 $31.61 per barrel, a 33.8% increase from the average price of $23.63 per
 barrel received for the comparable period in 1999.  The average price received
 for natural gas of $5.61 per Mcf for the fourth quarter of 2000 was 127.1%
 greater than the average price of $2.47 per Mcf received in 1999.
     The Company's oil and natural gas production totaled 2.6 Bcfe of natural
 gas for the fourth quarter of 2000, a decline of 29.7% compared to 3.7 Bcfe of
 natural gas for the fourth quarter of 1999.  Crude oil production during the
 fourth quarter of 2000 was 159 thousand barrels ("Mbls"), compared to 270 Mbls
 in 1999.  Natural gas production during the fourth quarter of 2000 was 1.6 Bcf
 compared to 2.1 Bcf in 1999.  The decline in oil and gas production was caused
 by natural production declines combined with the loss of production from non-
 strategic properties sold at an oil and gas auction in December 1999.  The
 Company's ability to offset these declines through its drilling and
 exploration program was limited during 1999 and the first half of 2000 due to
 Bankruptcy Court restrictions.  With the emergence from Bankruptcy, the
 Company initiated a drilling program in the second half of 2000 and has a
 budget of approximately $29 million in 2001 for its exploration and
 development programs, which is expected to be funded from cash flow from
 operations.
     The Company reported net income for the three months ended December 31,
 2000 of $4.5 million, or $.47 per share compared with a net loss of
 $1.3 million, or $(.22) per share for 1999.  The results for the fourth
 quarter of 2000 include a $.4 million extraordinary gain on discharge of
 indebtedness in connection with the confirmation of the Joint Plan of
 Reorganization.  The results for the fourth quarter of 1999 include net
 reorganization costs of approximately $5.8 million related to the Bankruptcy
 Proceeding and exclude $4.4 million of interest expense on the senior notes
 due to the Bankruptcy.  Excluding the effect of the above items, the Company
 would have reported net income of $4.1 million ($.43 per share) for the fourth
 quarter of 2000 compared with a net income of $.1 million ($.02 per share) for
 1999.
     The Company's cash flow from operations before changes in working capital
 for the three months ended December 31, 2000 increased to $6.1 million,
 compared to $4.9 million from the same period in 1999, due primarily to the
 increase in commodity prices.  Cash flow per share for the three months ended
 December 31, 2000 was $.64 per share, compared to $.85 per share in 1999.
 
     For the Twelve Months Ended December 31, 2000
     Total revenues increased by $11.7 million (29.8%) to $51.0 million for
 2000 from $39.3 million in 1999.  The increase in revenues is due to the
 increase in oil and gas prices from the same period in 1999, offset in part by
 a decline in overall production.  Average natural gas prices increased
 $1.83 per Mcf to $3.91 per Mcf for 2000 from $2.08 per Mcf for 1999, and
 average oil prices increased $11.62 per barrel to $29.24 per barrel for 2000
 from $17.62 per barrel for 1999.
     In 2000, the Company produced 799 Mbls of oil, a decrease of 29.6%
 compared to 1,135 Mbls in 1999, and the Company produced 7.1 Bcf of natural
 gas in 2000, a decrease of 23.6% from 9.3 Bcf in the same period of 1999.  The
 decline in production is primarily due to natural production declines combined
 with the loss of production from non-strategic properties sold at an oil and
 gas auction in December 1999.  During the Bankruptcy Proceeding, the Company's
 ability to offset natural production declines through drilling and exploration
 was limited due to the Bankruptcy Court restrictions.  However, the Company
 has emerged from Chapter 11 and is operating its business in the ordinary
 course and initiated drilling activity in the second half of 2000.  The
 Company has a budget of approximately $29 million in 2001 for its exploration
 and development programs, which is expected to be funded from cash flow from
 operations.
     A net loss of $14.4 million was recognized for 2000, compared with net
 income of $2.0 million for the comparable 1999 period.  Primarily due to the
 reinstatement of the Unaccrued Interest, results for 2000 and 1999,
 (i) include expenses of $1.4 million and $7.9 million, respectively, relating
 to the Bankruptcy Proceeding and (ii) include $1.1 million and $.8 million in
 interest income on cash accumulating during the Bankruptcy Proceeding.  The
 year ended December 31, 2000 includes a $33.0 million extraordinary loss in
 connection with the confirmation of the Joint Plan of Reorganization.  The
 year ended December 31, 1999 excludes $17.7 million in additional interest
 expense on the senior notes not accrued during the Bankruptcy Proceeding
 pursuant to Bankruptcy Court rules and regulations.  Excluding the effect of
 the above items, net income of $18.9 million would have been recognized for
 2000 compared to a net loss of $8.6 million for the same period in 1999.
     The Company's cash flow from operations before changes in working capital
 for the twelve months ended December 31, 2000 increased to $29.1 million from
 $20.9 million from the same period in 1999 primarily due to the increase in
 commodity prices.  Cash flow per share for 2000 was $4.24 per share as
 compared to $3.59 per share for the same period in 1999.
     National Energy Group, Inc. is a Dallas, Texas based independent oil and
 gas exploration and production company.  The Company's principal properties
 are located in Texas, Louisiana, Oklahoma and Arkansas.
     This press release may contain projections and other forward-looking
 statements within the meaning of Section 21E of the Securities Exchange Act of
 1934, as amended.  Any such projections or statements reflect the Company's
 current views with respect to future events and financial performance.  No
 assurances can be given, however, that these events will occur or that such
 projections will be achieved and actual results could differ materially from
 those projected.  A discussion of important factors that could cause actual
 results to differ materially from those projected is included in the Company's
 periodic reports filed with the Securities and Exchange Commission.
 
 
                          National Energy Group, Inc.
                           Summary Financial Results
                     (In thousands, except per share data)
 
                                     Three months ended        Year ended
                                        December 31,          December 31,
                                      2000       1999        2000       1999
     Production:
       Oil (Mbls)                       159        270         799      1,135
       Natural gas (Mcf)              1,612      2,078       7,081      9,266
       Natural gas equivalent
        (Mcfe)                        2,564      3,698      11,873     16,078
 
     Average Sales Price:
       Oil ($/Bbls)                  $31.61     $23.63      $29.24     $17.62
       Natural gas ($/Mcf)             5.61       2.47        3.91       2.08
       Natural gas equivalent
        ($/Mcfe)                       5.49       3.11        4.30       2.44
 
     Results of Operations Data:
       Revenues:
         Oil and natural gas
          sales                     $14,071    $11,501     $51,014    $39,300
       Costs and expenses:
         Lease operating              1,492      1,684       5,672      6,101
         Oil and natural gas
          production taxes              583        714       2,888      2,095
         Depreciation, depletion and
          amortization                2,556      3,002      11,044     15,889
         General and administrative   1,181      1,074       4,527      4,098
           Total costs and expenses   5,812      6,474      24,131     28,183
 
       Operating income               8,259      5,027      26,883     11,117
 
       Interest expense (B)          (5,058)      (504)     (9,656)    (1,909)
       Interest income and other,
        net                           1,262        ---       1,671        ---
 
       Income before reorganization
        items and income taxes        4,463      4,523      18,898      9,208
     Reorganization items:
       Professional fees and other     (338)    (2,874)     (1,354)    (4,727)
       Writeoff unamortized debt
        premium and issuance costs,
        net                             ---     (3,219)        ---     (3,219)
       Interest earned on accumulating
        cash while in Chapter 11        ---        317       1,065        762
     Income (loss) before income
      taxes                           4,125     (1,253)     18,609      2,024
     Provision for income taxes         ---        ---         ---        ---
     Income (loss) before
      extraordinary charge            4,125     (1,253)     18,609      2,024
     Extraordinary gain (loss) on
      discharge of indebtedness         397        ---     (33,047)       ---
     Net income (loss)                4,522     (1,253)    (14,438)     2,024
     Preferred stock dividend           ---        ---         ---        ---
     Net income (loss) to common
      shareholders                   $4,522    $(1,253)   $(14,438)    $2,024
 
     Cash Flow Data:
       Cash flow from
        operations (A)               $6,080     $4,931     $29,146    $20,911
       EBITDA (C)                    10,815      8,029      37,927     27,006
       Capital expenditures (oil
        and natural gas)              6,248        749      14,089      3,786
 
     Per share data:
       Income (loss) before
        extraordinary item, basic
        and diluted                    $.43      $(.22)      $2.71       $.35
       Gain (loss) on discharge of
        indebtedness, basic and
        diluted                         .04        ---       (4.81)       ---
       Net income (loss), per common
        share, basic and diluted       $.47      $(.22)     $(2.10)      $.35
       Cash flow from operations,
        basic and diluted (A)          $.64       $.85       $4.24      $3.59
 
     Shares used in per share computations:
       Earnings per share,
        basic and diluted             9,571      5,819       6,876      5,819
       Cash flow per share,
        basic and diluted             9,571      5,819       6,876      5,819
 
 
                          National Energy Group, Inc.
                            Condensed Balance Sheet
                                 (In thousands)
 
                                                   December 31,   December 31,
                                                       2000           1999
     Assets
       Cash, cash equivalents and marketable
        securities                                    $43,328        $29,560
       Other current assets                            10,542          6,960
       Oil and natural gas properties                  63,778         61,048
       Other assets                                     1,006          2,790
         Total assets                                $118,654       $100,358
 
 
     Liabilities and Stockholders' Deficit:
       Liabilities not subject to compromise             $---        $33,105
       Liabilities subject to compromise                  ---        182,159
       Current liabilities                             34,036            ---
       Long-term liabilities                              967            ---
       Senior Notes                                   165,000            ---
       Long-term interest payables                     45,822            ---
       Stockholders' deficit                         (127,171)      (114,906)
         Total liabilities and stockholders'
          deficit                                    $118,654       $100,358
 
     (A)  Cash flow from operations is shown before changes in working capital
          accounts.
     (B)  This amount excludes $4.4 million of additional interest expense that
          would have been recognized by the Company for the fourth quarter of
          1999 and $17.7 million and $10.5 million of additional interest
          expense that would have been recognized by the Company for the year
          ended December 31, 1999 and 2000 if not for the discontinuation of
          the interest accrual on the Senior Notes pursuant to the Bankruptcy
          Proceedings.
     (C)  "EBITDA" (earnings before interest, taxes, depreciation and
          amortization expense and reorganization items) is presented here not
          as a measure of operating results, but rather as a measure of the
          Company's operating performance.  Management of the Company believes
          that EBITDA, may provide additional information about the Company's
          ability to meet its future requirements for debt service, capital
          expenditures and working capital.  EBITDA should not be construed as
          an alternative to operating income (determined in accordance with
          generally accepted accounting principles ("GAAP") as an indicator of
          the Company's operating performance or as an alternative to cash
          flows from operating activities (determined in accordance with GAAP)
          as a measure of liquidity.  EBITDA measures presented herein may not
          be comparable to similarly titled measures of other companies."
 
 

SOURCE National Energy Group, Inc.
    DALLAS, April 19 /PRNewswire/ -- National Energy Group, Inc.
 (OTC Bulletin Board:   NEGI) today announces fiscal year 2000 oil and gas
 reserves and earnings results for the year and fourth quarter ended
 December 31, 2000.
 
     Oil and Gas Reserves
     National Energy Group, Inc. announced today that at December 31, 2000, the
 Company's estimated total proved oil and natural gas reserves were
 64.0 billion cubic feet ("Bcf") of natural gas and 5.8 million barrels of
 crude oil or 98.7 Bcf equivalent ("Bcfe") of natural gas.  Natural gas
 accounted for 64.8% of the total proved reserves and 87.7% of the total proved
 reserves were classified as proved developed.
     Based on SEC reporting guidelines, the pretax discounted present value of
 the future net cash flows of the Company's total proved reserves was
 approximately $372.0 million, using average oil and natural gas prices at
 December 31, 2000 of $10.53 per million cubic feet ("Mcf") of natural gas and
 $25.95 per barrel of crude oil.  During 2000, the Company added proved
 reserves totaling 21.1 Bcfe and sold a total of 7.2 Bcfe.  The proved reserve
 additions of 21.1 Bcfe represent a 178.1% replacement of production for 2000.
 
     Results of Operations
     In connection with confirmation of the Joint Plan of Reorganization, the
 Company recorded an extraordinary gain on the discharge of indebtedness during
 the three months ended September 30, 2000 of approximately $11.3 million.
 This extraordinary gain was primarily composed of the reversal of interest
 accrued on the senior notes prior to the Bankruptcy Proceeding of
 approximately $10.5 million ("Prepetition Interest").  In accordance with
 Bankruptcy Court rules and regulations, the Company did not accrue interest on
 the senior notes during the Bankruptcy Proceeding ("Unaccrued Interest").  It
 was determined that reinstatement of the Prepetition Interest and the
 Unaccrued Interest is necessary and consistent with the Joint Plan of
 Reorganization.  As a result, the Company has recognized Unaccrued Interest
 (including interest on the Prepetition Interest and Unaccrued Interest) of
 $35.3 million and Prepetition Interest of $10.5 million as long-term interest
 payable at December 31, 2000.  The reinstatement of Unaccrued Interest has
 been recognized as an extraordinary loss in the year 2000 statement of
 operations.  In Note 13 to the Company's Consolidated Financial Statements
 contained in its Form 10-K for the year ended December 31, 2000, the results
 of operations for the quarter ended September 30, 2000 have been restated to
 reflect this reinstatement.  The Company and Arnos Corp. and its affiliate,
 the holders of the senior notes, have agreed this interest will not be due
 earlier than April 2003.  Accordingly, interest will accrue on the revised
 obligation amount of $210.8 million pursuant to terms of the senior notes
 indenture.
 
     For the Three Months Ended December 31, 2000
     Revenues for the three months ended December 31, 2000 were $14.1 million,
 up 22.6% from $11.5 million in 1999, due to the increase in oil and gas prices
 from 1999, offset in part by a decline in overall production.  The average
 price received by the Company for crude oil for the fourth quarter of 2000 was
 $31.61 per barrel, a 33.8% increase from the average price of $23.63 per
 barrel received for the comparable period in 1999.  The average price received
 for natural gas of $5.61 per Mcf for the fourth quarter of 2000 was 127.1%
 greater than the average price of $2.47 per Mcf received in 1999.
     The Company's oil and natural gas production totaled 2.6 Bcfe of natural
 gas for the fourth quarter of 2000, a decline of 29.7% compared to 3.7 Bcfe of
 natural gas for the fourth quarter of 1999.  Crude oil production during the
 fourth quarter of 2000 was 159 thousand barrels ("Mbls"), compared to 270 Mbls
 in 1999.  Natural gas production during the fourth quarter of 2000 was 1.6 Bcf
 compared to 2.1 Bcf in 1999.  The decline in oil and gas production was caused
 by natural production declines combined with the loss of production from non-
 strategic properties sold at an oil and gas auction in December 1999.  The
 Company's ability to offset these declines through its drilling and
 exploration program was limited during 1999 and the first half of 2000 due to
 Bankruptcy Court restrictions.  With the emergence from Bankruptcy, the
 Company initiated a drilling program in the second half of 2000 and has a
 budget of approximately $29 million in 2001 for its exploration and
 development programs, which is expected to be funded from cash flow from
 operations.
     The Company reported net income for the three months ended December 31,
 2000 of $4.5 million, or $.47 per share compared with a net loss of
 $1.3 million, or $(.22) per share for 1999.  The results for the fourth
 quarter of 2000 include a $.4 million extraordinary gain on discharge of
 indebtedness in connection with the confirmation of the Joint Plan of
 Reorganization.  The results for the fourth quarter of 1999 include net
 reorganization costs of approximately $5.8 million related to the Bankruptcy
 Proceeding and exclude $4.4 million of interest expense on the senior notes
 due to the Bankruptcy.  Excluding the effect of the above items, the Company
 would have reported net income of $4.1 million ($.43 per share) for the fourth
 quarter of 2000 compared with a net income of $.1 million ($.02 per share) for
 1999.
     The Company's cash flow from operations before changes in working capital
 for the three months ended December 31, 2000 increased to $6.1 million,
 compared to $4.9 million from the same period in 1999, due primarily to the
 increase in commodity prices.  Cash flow per share for the three months ended
 December 31, 2000 was $.64 per share, compared to $.85 per share in 1999.
 
     For the Twelve Months Ended December 31, 2000
     Total revenues increased by $11.7 million (29.8%) to $51.0 million for
 2000 from $39.3 million in 1999.  The increase in revenues is due to the
 increase in oil and gas prices from the same period in 1999, offset in part by
 a decline in overall production.  Average natural gas prices increased
 $1.83 per Mcf to $3.91 per Mcf for 2000 from $2.08 per Mcf for 1999, and
 average oil prices increased $11.62 per barrel to $29.24 per barrel for 2000
 from $17.62 per barrel for 1999.
     In 2000, the Company produced 799 Mbls of oil, a decrease of 29.6%
 compared to 1,135 Mbls in 1999, and the Company produced 7.1 Bcf of natural
 gas in 2000, a decrease of 23.6% from 9.3 Bcf in the same period of 1999.  The
 decline in production is primarily due to natural production declines combined
 with the loss of production from non-strategic properties sold at an oil and
 gas auction in December 1999.  During the Bankruptcy Proceeding, the Company's
 ability to offset natural production declines through drilling and exploration
 was limited due to the Bankruptcy Court restrictions.  However, the Company
 has emerged from Chapter 11 and is operating its business in the ordinary
 course and initiated drilling activity in the second half of 2000.  The
 Company has a budget of approximately $29 million in 2001 for its exploration
 and development programs, which is expected to be funded from cash flow from
 operations.
     A net loss of $14.4 million was recognized for 2000, compared with net
 income of $2.0 million for the comparable 1999 period.  Primarily due to the
 reinstatement of the Unaccrued Interest, results for 2000 and 1999,
 (i) include expenses of $1.4 million and $7.9 million, respectively, relating
 to the Bankruptcy Proceeding and (ii) include $1.1 million and $.8 million in
 interest income on cash accumulating during the Bankruptcy Proceeding.  The
 year ended December 31, 2000 includes a $33.0 million extraordinary loss in
 connection with the confirmation of the Joint Plan of Reorganization.  The
 year ended December 31, 1999 excludes $17.7 million in additional interest
 expense on the senior notes not accrued during the Bankruptcy Proceeding
 pursuant to Bankruptcy Court rules and regulations.  Excluding the effect of
 the above items, net income of $18.9 million would have been recognized for
 2000 compared to a net loss of $8.6 million for the same period in 1999.
     The Company's cash flow from operations before changes in working capital
 for the twelve months ended December 31, 2000 increased to $29.1 million from
 $20.9 million from the same period in 1999 primarily due to the increase in
 commodity prices.  Cash flow per share for 2000 was $4.24 per share as
 compared to $3.59 per share for the same period in 1999.
     National Energy Group, Inc. is a Dallas, Texas based independent oil and
 gas exploration and production company.  The Company's principal properties
 are located in Texas, Louisiana, Oklahoma and Arkansas.
     This press release may contain projections and other forward-looking
 statements within the meaning of Section 21E of the Securities Exchange Act of
 1934, as amended.  Any such projections or statements reflect the Company's
 current views with respect to future events and financial performance.  No
 assurances can be given, however, that these events will occur or that such
 projections will be achieved and actual results could differ materially from
 those projected.  A discussion of important factors that could cause actual
 results to differ materially from those projected is included in the Company's
 periodic reports filed with the Securities and Exchange Commission.
 
 
                          National Energy Group, Inc.
                           Summary Financial Results
                     (In thousands, except per share data)
 
                                     Three months ended        Year ended
                                        December 31,          December 31,
                                      2000       1999        2000       1999
     Production:
       Oil (Mbls)                       159        270         799      1,135
       Natural gas (Mcf)              1,612      2,078       7,081      9,266
       Natural gas equivalent
        (Mcfe)                        2,564      3,698      11,873     16,078
 
     Average Sales Price:
       Oil ($/Bbls)                  $31.61     $23.63      $29.24     $17.62
       Natural gas ($/Mcf)             5.61       2.47        3.91       2.08
       Natural gas equivalent
        ($/Mcfe)                       5.49       3.11        4.30       2.44
 
     Results of Operations Data:
       Revenues:
         Oil and natural gas
          sales                     $14,071    $11,501     $51,014    $39,300
       Costs and expenses:
         Lease operating              1,492      1,684       5,672      6,101
         Oil and natural gas
          production taxes              583        714       2,888      2,095
         Depreciation, depletion and
          amortization                2,556      3,002      11,044     15,889
         General and administrative   1,181      1,074       4,527      4,098
           Total costs and expenses   5,812      6,474      24,131     28,183
 
       Operating income               8,259      5,027      26,883     11,117
 
       Interest expense (B)          (5,058)      (504)     (9,656)    (1,909)
       Interest income and other,
        net                           1,262        ---       1,671        ---
 
       Income before reorganization
        items and income taxes        4,463      4,523      18,898      9,208
     Reorganization items:
       Professional fees and other     (338)    (2,874)     (1,354)    (4,727)
       Writeoff unamortized debt
        premium and issuance costs,
        net                             ---     (3,219)        ---     (3,219)
       Interest earned on accumulating
        cash while in Chapter 11        ---        317       1,065        762
     Income (loss) before income
      taxes                           4,125     (1,253)     18,609      2,024
     Provision for income taxes         ---        ---         ---        ---
     Income (loss) before
      extraordinary charge            4,125     (1,253)     18,609      2,024
     Extraordinary gain (loss) on
      discharge of indebtedness         397        ---     (33,047)       ---
     Net income (loss)                4,522     (1,253)    (14,438)     2,024
     Preferred stock dividend           ---        ---         ---        ---
     Net income (loss) to common
      shareholders                   $4,522    $(1,253)   $(14,438)    $2,024
 
     Cash Flow Data:
       Cash flow from
        operations (A)               $6,080     $4,931     $29,146    $20,911
       EBITDA (C)                    10,815      8,029      37,927     27,006
       Capital expenditures (oil
        and natural gas)              6,248        749      14,089      3,786
 
     Per share data:
       Income (loss) before
        extraordinary item, basic
        and diluted                    $.43      $(.22)      $2.71       $.35
       Gain (loss) on discharge of
        indebtedness, basic and
        diluted                         .04        ---       (4.81)       ---
       Net income (loss), per common
        share, basic and diluted       $.47      $(.22)     $(2.10)      $.35
       Cash flow from operations,
        basic and diluted (A)          $.64       $.85       $4.24      $3.59
 
     Shares used in per share computations:
       Earnings per share,
        basic and diluted             9,571      5,819       6,876      5,819
       Cash flow per share,
        basic and diluted             9,571      5,819       6,876      5,819
 
 
                          National Energy Group, Inc.
                            Condensed Balance Sheet
                                 (In thousands)
 
                                                   December 31,   December 31,
                                                       2000           1999
     Assets
       Cash, cash equivalents and marketable
        securities                                    $43,328        $29,560
       Other current assets                            10,542          6,960
       Oil and natural gas properties                  63,778         61,048
       Other assets                                     1,006          2,790
         Total assets                                $118,654       $100,358
 
 
     Liabilities and Stockholders' Deficit:
       Liabilities not subject to compromise             $---        $33,105
       Liabilities subject to compromise                  ---        182,159
       Current liabilities                             34,036            ---
       Long-term liabilities                              967            ---
       Senior Notes                                   165,000            ---
       Long-term interest payables                     45,822            ---
       Stockholders' deficit                         (127,171)      (114,906)
         Total liabilities and stockholders'
          deficit                                    $118,654       $100,358
 
     (A)  Cash flow from operations is shown before changes in working capital
          accounts.
     (B)  This amount excludes $4.4 million of additional interest expense that
          would have been recognized by the Company for the fourth quarter of
          1999 and $17.7 million and $10.5 million of additional interest
          expense that would have been recognized by the Company for the year
          ended December 31, 1999 and 2000 if not for the discontinuation of
          the interest accrual on the Senior Notes pursuant to the Bankruptcy
          Proceedings.
     (C)  "EBITDA" (earnings before interest, taxes, depreciation and
          amortization expense and reorganization items) is presented here not
          as a measure of operating results, but rather as a measure of the
          Company's operating performance.  Management of the Company believes
          that EBITDA, may provide additional information about the Company's
          ability to meet its future requirements for debt service, capital
          expenditures and working capital.  EBITDA should not be construed as
          an alternative to operating income (determined in accordance with
          generally accepted accounting principles ("GAAP") as an indicator of
          the Company's operating performance or as an alternative to cash
          flows from operating activities (determined in accordance with GAAP)
          as a measure of liquidity.  EBITDA measures presented herein may not
          be comparable to similarly titled measures of other companies."
 
 SOURCE  National Energy Group, Inc.

RELATED LINKS

http://www.negx.com