SAN ANTONIO, Aug. 19 TX-STXX-Q2-08-Results
SAN ANTONIO, Aug. 19 /PRNewswire-FirstCall/ -- South Texas Oil Company
(Nasdaq: STXX) today announced second quarter 2008 financial results.
Highlights:
-- Record Oil & Gas Sales: $3.8 Million
Second Quarter 2008 Results
The Company reported record oil and gas sales for the quarter-ended
June 30, 2008 of $3.8 million, versus $796,000 in the same period in 2007, an
increase of 383%. Total revenues were $3.8 million for the second quarter
2008, versus $1.3 million in the year-ago period. Drilling services, a
revenue line item in previous periods, did not contribute to total revenue in
the 2008 quarterly period, but did contribute $522,000 in the second quarter
2007.
The Company reported a net loss for the second quarter 2008 of
$6.8 million, or $0.42 per share, compared with a net loss of $800,000, or
$0.07 per share, for the same period in 2007. Included in the second quarter
2008 costs and expenses was a loss from derivatives of $4.3 million, compared
to no loss for the same period in 2007. The agreements which generated the
losses during the second quarter 2008 were completely offset by additional
contracts purchased at the end of the quarter. Because of the contracts'
covered status, the Company does not anticipate that future additional losses
will be realized from the contracts that were outstanding during the second
quarter 2008. The Company did not engage in derivative transactions during
the second quarter 2007.
All per-share amounts are presented on a weighted average basis. At
June 30, 2008, 16,017,736 weighted average shares were outstanding.
First Half 2008 Results
The Company reported oil and gas sales for the six months-ended June
30, 2008 of $5.7 million, versus $892,000 in the same period in 2007, an
increase of 542%. Total revenues were $5.7 million for the first half of
2008, versus $1.4 million in the year-ago period. Drilling services, a
revenue line item in previous periods, did not contribute to total revenue in
the 2008 year-to-date period, but did contribute $522,000 in the same period
in 2007.
The Company reported a net loss for the first half of 2008 of
$10.2 million, or $0.63 per share, compared with a net loss of $1.3 million,
or $0.10 per share, for the same period in 2007. Included in the first half
2008's costs and expenses was a loss from derivatives of $5.4 million,
compared to no loss for the same period in 2007. The Company did not engage
in derivative transactions during the comparable period in 2007.
For the first half of 2008, net cash used in operations was $176,000, as
compared to net cash used in operations for the same period in 2007 of
$767,000.
At June 30, 2008, the Company's total assets were $64.7 million and
stockholders' equity was $20.5 million. The Company's cash position at June
30, 2008 was $4.9 million, and its long-term debt was $34.1 million.
Management Comment
Mike Pawelek, President and CEO, said: "The new management team joined
the Company at the end of this reporting period, on June 23, 2008. One of our
main objectives is to strengthen our financial and operating performance going
forward as our management styles and industry experiences become imbued at
South Texas. The Company's asset portfolio is strong and lends itself to
development drilling and measured-risk exploration. To help the income
statement, we eliminated a glaring line item by largely unwinding the hedge
position that contributed to the net loss we posted during the second quarter.
On the operations front, in a subsequent event, we spudded the State Tract 127
#1 well in state waters in Matagorda Bay, Texas. The well, which we operate
with an approximate 20% working interest, targets the Frio formation at a
proposed measured depth of 12,000 feet. We expect to reach total depth on the
well in mid-September. The Company anticipates furnishing a more
comprehensive operations update later in the third quarter.
"We acknowledge that drilling and completion results are the one of the
key marks of our effectiveness as management. We welcome the challenge. I
look forward to providing our shareholders with additional updates now that we
are firmly at the helm of South Texas Oil and working diligently to grow
reserves and production."
About South Texas Oil Company
San Antonio-based South Texas Oil Company is an independent oil and
natural gas exploration and production company with operations in South Texas,
the Gulf Coast and in Colorado. The Company has approximately 27,000 net
acres and a high-working-interest inventory of drillable locations within its
operating areas.
Forward-looking Statements
Certain statements made in this press release contain forward-looking
statements that involve a number of risks and uncertainties. This
forward-looking information is based on certain assumptions, including, among
others, presently known physical data concerning size and character of
reservoirs and economic recoverability. Some of these expectations may be
based upon assumptions or judgments that prove to be incorrect. In addition,
operations involve numerous risks and uncertainties, many of which are beyond
South Texas Oil's control, which could result in expectations not being
realized or otherwise materially affect the financial condition, results of
operation and cash flows. Additional information regarding these and other
risks are contained in South Texas Oil's filings with the Securities and
Exchange Commission.
SOURCE South Texas Oil Company
