DENVER, June 30 CO-Basic-Earth-10-KSB
DENVER, June 30 /PRNewswire-FirstCall/ -- Basic Earth Science Systems,
Inc. ("Basic" or "the Company") (OTC Bulletin Board: BSIC) reported that it
has filed a Form 12b-25 - "Notification of Late Filing" with the Securities
Exchange Commission requesting a fifteen day extension of its Form 10-KSB
filing deadline. The extension became necessary following the Company's
recent filing of a Form 8-K, Item 4.02 - "Non-Reliance on Previously Filed
Financial Statements" for the fiscal years 2006 and 2007.
Based on its current knowledge, upon filing Form 10-KSB, the Company
expects to report net income of $1,763,000, ten cents ($0.10) per share, on
oil and gas sales revenue of approximately $7.4 million for the year ended
March 31, 2008 ("2008"). This compares to restated net income of $2,055,000,
nearly twelve cents ($0.12) per share (restated), on oil and gas sales revenue
of approximately $7.2 million for the year ended March 31, 2007 ("2007"). The
$280,000 (4%) increase in oil and gas sales revenue was due primarily to
higher oil prices relative to 2007. Net income for 2008 decreased $292,000
(14%). Relative to 2007, net income in 2008 was greatly impacted by increased
oil and gas production expense, general and administrative expense and
provision for deferred income tax expense. Other factors which contributed to
our annual results will be disclosed in the Company's forthcoming Form 10-KSB.
At this time, Basic is not aware of any issue that would substantially affect
these results.
"We would have been much happier to have filed last week and to have
shared the details of these results then, but our upcoming restatement of
fiscal 2006 and 2007 has adversely impacted that time table," commented Ray
Singleton, President of Basic. "Our results are a mixed story. Revenue,
reserves, EBITDA and cash were all up. Reserves, measured by the present
value of future cash flow, discounted at 10%, alone increased 78% and we
achieved a 6.4% increase in BOE (barrels of oil, equivalent) reserves;
replacing 185% of our produced barrels. On the other hand, oil and gas sales
were down significantly. Oil sales volumes were down 15,000 barrels (14%) from
last year and gas sales volumes were down 47,600 MMCF (30%). Over two-thirds
of the oil slump was due to continued normal production declines on our
Halverson wells, two horizontal Bakken wells in Richland County, Montana. In
addition, in Webb County, Texas, operational issues in the fourth quarter
(salt water disposal and new oil transporters) adversely affected production
and sales on our West Cole North Unit, our largest oil producing property.
These issues have been rectified and should not affect the current quarter.
Gas sales declined largely due to construction on our Antenna Federal property
where all of our wells were shut in for several months to facilitate the
installation of new tank batteries."
"This last year, and especially the fourth quarter, has been one of
significant change. With a dramatic realignment of personnel and the
departure of our long-time chief financial officer, we have had a number of
challenges. Nevertheless, once our upcoming filing is made, overall, we feel
we are in a great position to move forward with our plans for continued growth
and success," concluded Singleton.
Founded in 1969, Basic is an oil and gas exploration and production
company with primary operations in select areas of the Williston basin, the
Denver-Julesburg basin in Colorado, the southern portions of Texas, and along
the on-shore portions of the Gulf Coast. Basic is traded on the
"over-the-counter - bulletin board" under the symbol BSIC. Basic's web site
is at http://www.basicearth.net where additional information about the Company
can be accessed.
Information herein contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, which can be
identified by words such as "should," "may," "will," "anticipate," "estimate,"
"intend" or "continue," or comparable words or phrases. Such forward-looking
statements include, but are not limited to, statements regarding Basic's
preliminary restated results and other items based on Basic's current
expectations and involve risks and uncertainties including, but not limited
to, risks and uncertainties related to changes in the correction of the error
referenced herein, identification of additional accounting errors or
corrections, and/or additional recommendations of the Audit Committee, and
other risks detailed from time to time in Basic's SEC filings. Basic cautions
that these factors, as well as other factors described in SEC filings, are
among the factors that could cause actual results to differ materially from
the expectations described in these forward-looking statements. Readers are
encouraged to read the SEC reports of Basic, particularly the Company's
Current Report on Form 8-K, for meaningful cautionary language disclosing why
actual results may vary materially from those anticipated by management.
SOURCE Basic Earth Science Systems, Inc.
