Magellan Petroleum Corporation Announces Fiscal 2008 Results
HARTFORD, Conn., Sept. 25 /PRNewswire-FirstCall/ -- Magellan Petroleum Corporation (Nasdaq: MPET) (ASX: MGN) reported consolidated results today for the fiscal year ended June 30, 2008. Results were mixed and included a 33% increase in gross revenues to $40.9 million. Although operating income increased to $3.3 million, results included a one-time $13.3 million ((AUS) $14.6 million) settlement of a dispute with the Australian Tax Office (ATO). The ATO settlement was the primary cause of the Company's consolidated net loss of $8.9 million ($.21 per share) as compared to net income of $447,000 ($.01 per share) on revenues of $30.7 million in fiscal 2007.
Magellan's president, Dan Samela said, "We've been able to absorb a difficult ATO settlement of $13.3 million ((AUS) $14.6 million) and increase our working capital since June 30, 2007 by $8.8 million on the strength of our cash flow from operations." He further stated that, "the non cash charges of $18 million for depletion, depreciation and amortization included $3.4 million related to the acquisition of the MPAL minority interest which was acquired in 2006. Total revenues are up 33% over last year, principally due to the successful oil drilling program in the Nockatunga oil fields and increased oil prices. Also, our cash and cash equivalents at the end of 2008 was $34.6 million, an increase of $6.2 million over last year".
Exploration and dry hole costs for fiscal 2008 were down $2.2 million over 2007 due to reduced exploration expenditures in the Cooper Basin.
Walter McCann, Magellan's chairman, said, "With the ATO matter behind us, we are focusing our efforts on maximizing the value of our Australian assets and our U.K. exploration efforts. In Australia we face important challenges as our Mereenie and Palm Valley contracts expire in June 2009 and 2012, respectively. We are working diligently to market the significant remaining reserves at these fields and are prudently examining alternatives that would best align expenses with various levels of future revenue."
Statements in this press release which are not historical in nature are intended to be, and are hereby identified as, forward looking statements for purposes of the "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. Magellan cautions readers that forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward looking statements. Among these risks and uncertainties are pricing and production levels from the properties in which the Magellan has interests and the extent of the recoverable reserves at those properties. In addition, the Magellan has a large number of exploration permits and faces the risk that any wells drilled may fail to encounter hydrocarbons in commercially recoverable quantities. Magellan undertakes no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.
Comparative, consolidated results for fiscal 2008 and the two prior years are shown in the following statements of income:
MAGELLAN PETROLEUM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended June 30,
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2008 2007 2006
---- ---- ----
Revenues:
Oil sales $19,786,175 $11,922,574 $10,615,761
Gas sales 18,523,095 16,396,334 14,060,968
Other production related
revenues 2,585,540 2,356,317 1,885,706
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Total revenues 40,894,810 30,675,225 26,562,435
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Costs and expenses:
Production costs 8,865,663 6,965,641 8,220,013
Exploratory and dry hole costs 3,318,810 5,520,460 3,264,837
Salaries and employee benefits 1,605,341 1,549,277 1,448,004
Depletion, depreciation and
amortization 18,021,236 10,693,415 6,308,608
Auditing, accounting and
legal services 1,102,115 628,114 398,514
Accretion expense 716,130 517,856 425,254
Shareholder communications 392,880 459,298 449,561
Loss on settlement of asset
retirement obligation -- -- 444,566
Gain on sale of field
equipment (35,235) (10,346) (119,445)
Impairment loss -- 1,876,171 --
Other administrative expenses 3,591,856 2,699,733 2,795,387
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Total costs and expenses 37,578,796 30,899,619 23,635,299
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Operating income (loss) 3,316,014 (224,394) 2,927,136
Interest income 2,122,642 1,669,798 1,268,641
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Income before income taxes
and minority interests 5,438,656 1,445,404 4,195,777
Income tax expense 14,330,301 998,565 1,678,980
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(Loss) income before minority
interests (8,891,645) 446,839 2,516,797
Minority interests -- -- (1,768,023)
----------- ---------- -----------
Net (loss) income $(8,891,645) $446,839 $748,774
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Average number of shares:
Basic 41,500,325 41,500,325 28,353,463
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Diluted 41,500,325 41,500,325 28,453,270
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Per share (basic and diluted)
Net (loss) income $(.21) $.01 $.03
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SOURCE Magellan Petroleum Corporation
Released September 25, 2008