Tengasco Announces Third Quarter 2011 Financial Results

KNOXVILLE, Tenn., Nov. 14, 2011 /PRNewswire/ -- Tengasco, Inc. (NYSE Amex: TGC) announced today its financial results for the quarter ended September 30, 2011.  The Company also filed today with the SEC its report on Form 10-Q for the quarter ended September 30, 2011. The Company realized net income attributable to common shareholders of $1.2 million or $0.02 per share of common stock during the third quarter of 2011, compared to a net income to common shareholders of $0.2 million or $0.00 per share of common stock in the third quarter of 2010.

The Company recognized $4.4 million in revenues during the third quarter of 2011 compared to $3.3 million in the third quarter of 2010. The increase in 2011 revenues was primarily due to a 5 MBbl increase in sales volumes as well as a $13.85 increase in Kansas oil prices. Kansas oil prices in the third quarter of 2011 averaged $82.49 per barrel compared to $68.64 per barrel in the third quarter of 2010.  In the third quarter of 2011, the Company had income from operations of $1.6 million compared to income from operations of $0.5 million in the third quarter of 2010.  The increase in net income attributable to common shareholders and the increase in income from operations were primarily due to the increase in Kansas sales volumes and oil prices as well as $0.5 increase in gain on derivatives.  

The Company recognized $12.8 million in revenues during the first nine months of 2011 compared to $9.4 million in the first nine months of 2010.  The increase in revenues was primarily due to an increase in oil prices in 2011, as well as a 16 MBbl increase in sales volumes.  Oil prices in the first nine months of 2011 averaged $88.22 per barrel compared to $70.22 per barrel in the first nine months of 2010.  The Company realized net income attributable to common shareholders of $2.5 million or $0.04 per share of common stock during the first nine months of 2011 compared to a net income in the first nine months of 2010 to common shareholders of $1.2 million or $0.02 per share of common stock.  During the first nine months of 2011, the Company had income from operations of $4.4 million compared to income from operations of $1.5 million during the first nine months of 2010.  The increase in net income attributable to common shareholders and the increase in income from operations were primarily due to the increase in Kansas sales volumes and oil prices, partially offset by increases in costs and expenses of $0.5 million.  This increase in net income was also partially offset by a $0.7 million decrease in gain on derivatives.

Jeffrey R. Bailey, CEO, said, "We are continuing to grow by the drill bit. Our net income from operations essentially tripled over the prior year period in both the third quarter and first nine months of 2011, resulting in an increase in earnings to $0.02 per share for the third quarter, increasing from $0.00 in the third quarter of 2010.  Over the first nine months, earnings per share doubled to $0.04 in 2011 from $0.02 per common share in the same period in 2010."    

Mr. Bailey continued, "We have drilled seven wells -- 4 producers and 3 dry holes -- since our last report, including those drilled early in the fourth quarter. We have been targeting the area of Trego County where we have had seismic success in the past and have found some of our best Kansas producers. Of the seven recent wells, one producer and two dry holes were drilled in Trego County.  We are currently drilling a fourth well in Trego County. The Mississippian formation in the area south and east of our current drilling has been a target for some extensive competitive leasing and horizontal drilling by other larger oil companies also looking at this same formation. We have focused in this area to secure our lease positions by moving them into the held-by-production category. We have also been drilling on other areas in Kansas where we want to hold newer leases by establishing production. Overall we believe we have built a strong inventory of leases that have additional drilling locations, but are currently held by production and therefore do not require additional drilling to hold the lease.  We will return to additional developmental drilling on those leases, when we have finished this exploration phase."

The Company will hold a telephone conference call on Monday, November 14, 2011 at 4:15 PM  Eastern Standard Time to discuss the Company's Report on Form 10-Q for the quarter year ended September 30, 2011 as follows:   

AUDIO: Shareholders and other interested parties may call Toll-Free (US & Canada): (888) 669-0687 and International Dial-In (Toll): (201) 604-0475 to participate in the conference call. Participants in the call will be required to register in order to participate in the conference call.  In addition, the audio presentation may also be heard by going to http://www.visualwebcaster.com/event.asp?id=83696.  Participants will be required to register at the above address to listen the presentation. Registration may be completed at any time prior to the beginning of the call.  

VIDEO:  A slideshow corresponding with the subjects of the conference call presentation will be accessible on Tengasco's website in PDF and PowerPoint formats at the time of the call.

A transcript of the conference call will be prepared 24 hours following the conference and will be available on the Company's website, which can be accessed at http://www.tengasco.com.   

Forward-looking statements made in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risk and uncertainties which may cause actual results to differ from anticipated results, including risks associated with the timing and development of the Company's reserves and projects as well as risks of downturns in economic conditions generally, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.

SOURCE Tengasco, Inc.